【Zillow】Mortgage Rates Drop on Slowing Economic Activity

The Federal Reserve increased the federal funds target rate by 75 basis points at the July meeting, in line with market expectations. But comments from Fed Chair Powell after the meeting were interpreted by many investors as more dovish than prior communications. In addition, several economic indicators pointed to slowing economic activity; GDP declined for the second quarter in a row, new home sales slowed, and consumer confidence dropped due to inflation and recession concerns. Investors reacted by driving longer term rates – such as yields on 10-year treasuries and mortgage-backed securities– lower, predicting the Fed will have to slow down rate hikes and potentially ease rates sooner than previously expected. Primary mortgage rates fell in turn.

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