Mortgage Rate Predictions: What's Next for Rates After May Fed Meeting

Mortgage rates can change daily and even hourly. Tharon Green/CNET The Federal Reserve may be standing its ground on interest rates, but the outlook for mortgage rates is still on shaky footing. Since early spring, average 30-year fixed rates have been moving between 6.5% and 7%, with no clear direction forward. Despite concerns over a potential recession and pressure from the White House to reduce interest rates, the central bank voted to leave its benchmark federal funds rate unchanged on May 7 to better evaluate the impact of the administration's trade and austerity measures. Though the Fed's policy changes have a ripple effect on all short-term lending rates, the central bank doesn't directly set the rates on home loans. Mortgage rates are primarily driven by movement in the bond market, specifically on the 10-year Treasury yield. Bond yields and mortgage interest rates rise and fall depending on how new economic data and policy changes shift market speculation and risk assess ... Read full article.