Despite strong economic data released earlier in the week, mortgage rates slid lower ahead of next week's Federal Reserve meeting.
Two economic reports which normally have moderate market influence – the Philadelphia Fed's manufacturing report and the University of Michigan's consumer sentiment index – beat expectations earlier in the week, news that would usually nudge bond yields, and mortgage rates, upward. The reaction, however, was muted, and markets are unlikely to make any substantial moves ahead of next week's meeting of the Federal Open Market Committee.
The two-day conference has loomed large for weeks now, and many view a 25-basis point cut to the federal funds rate as a foregone conclusion. As a result, it's doubtful that rates, which remain near multi-year lows, will fall in the near future. Should the Fed decide to forego the much-expected rate cut next week, a sharp uptick in mortgage rates is almost certain.
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