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Mortgage rates rose this week, as the Fed held their FOMC meeting on Wednesday. The Fed did not raise rates at their meeting, but they continue to project one more rate hike by year end, along with only two rate cuts in 2024. This new projection represents a reduction in rate cuts in 2024 and bond yields rose following the release.

While we treat these projections as just projections, the market started to price them in due to a continued belief the Fed will hold rates higher for longer. We do believe the increase in the price of oil is making the Fed's job tougher. As core inflation is coming down, adding back in food and energy prices inflation is starting to pick up again. With oil prices increasing the last few months, the Fed will need to continue to be aggressive in rate hikes to keep inflation in check. It is tough to imagine the Fed ignoring increasing oil prices and we think they will most likely look to hike at their next meeting in November if oil prices do not fall.

• US 10-year Treasury closed at 4.49% on Thursday afternoon

• Housing Starts came in lower than analysts' expectations (1.283 million starts vs expectations of 1.439 million starts)

• Building Permits came in higher than analysts' expectations (1.543 million permits vs expectations of 1.44 million permits)

• Existing Home Sales came in lower than analysts' expectations (4.04mm vs expectations of 4.1mm

• Initial Jobless Claims came in lower than analysts' expectations (201k claims vs expectations of 225k claims)

• Mortgage Applications rose 5.4% this week