The Fed may RAISE interest rates Wednesday.
So mortgage rates go higher too, right?
Not necessarily. 🤯
The Federal Reserve controls a short-term interest rate. Mortgage rates are driven much more by the bond market, including Treasury yields and mortgage-backed securities.
If the Fed raises rates and convinces investors it is serious about fighting inflation, longer-term Treasury yields could actually FALL.
And mortgage rates could potentially fall with them.
That's why watching only the Fed Funds Rate can give homebuyers completely the wrong idea about where mortgage rates are headed.
Wednesday could get VERY interesting.
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Russell McDonald | NMLS 290837 | Broker CA DRE 01150730
Wymac Capital Inc | NMLS 18766 | Broker CA DRE 01121628
Real Estate Broker – CA Dept of Real Estate