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Fed Hikes and Mortgage Rates

May 16, 2022

Source: MSB Highway

Recently, the Fed hiked the Fed Funds Rate by 0.5%. This was the second rate hike of the year, with the first being 0.25%.

The Fed has also told us that we can expect two more 0.5% hikes by the end of July.

Inflation has been rising, so the Fed is hiking rates to combat this. This rapid rise in inflation has pushed mortgage rates higher. Interestingly, as the Fed hikes rates to slow the economy, inflation should subside, which will likely cause mortgage rates to ease towards the end of the year.

Remember that the Fed controls the Fed Funds Rate, which is very short term, and not mortgage rates.

Reach out to us today to learn more about how this affects your home buying or refinance journey.

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