Mortgage rates rose slightly this morning with the average lender moving up to the highest level in nearly 2 weeks. The top tier 30 year fixed scenario is effectively back at 7% for most lenders.

This was not necessarily the case at the start of the day, but the bond market quickly lost ground, forcing lenders to issue rate hikes mid-day. As the day wore on, the bonds recovered their footing, and many lenders were able to undo changes made earlier in the day.

All the above mentioned activities are negligible in comparison to what we can see in the next 2 days. Yesterday morning’s Consumer Price Index (CPI) is one of the biggest sources of volatility for rates in any given month. Next afternoon, we’ll get the Fed’s decision on a “pause/leave” in the rate hike cycle, which is what the market is currently expecting.

The CPI could theoretically move high enough for traders to change their outlook on Wednesday’s Fed rate decision. Nevertheless, the Fed’s updated outlook for the fed funds rate (also released Wednesday afternoon) has the same power – if not more – to generate volatility for rates/bonds.

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