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Market
Comment
Mortgage bond prices finished the week sharply lower which put continued upward pressure on rates. Trading started steady with rates holding near unchanged Monday and Tuesday. Volatility resumed later in the week across stocks and bonds. The data was mixed but was overshadowed by disruptions in natural gas and oil facilities in the Middle East. NAHB housing was 38 vs 37. Producer prices rose 0.7% vs 0.3%. Core prices were up 0.5% vs 0.3%. Factory orders rose 0.1% as expected. New home sales were 587K vs 720K. Weekly jobless claims were 205K vs 215K. The Fed left rates unchanged. Mortgage interest rates finished the week worse by approximately 5/8 to 3/4 of a discount point.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Construction Spending |
Monday, March 23,
10:00 am, et
|
Up 0.1%
|
Low importance. An indication of economic strength. Significant weakness may lead to lower rates.
|
| Weekly ADP Employment |
Tuesday, March 24,
8:30 am, et
|
9K
|
Important. An indication of employment. Weakness may bring lower rates.
|
| Q4 Productivity |
Tuesday, March 24,
8:30 am, et
|
Up 2.5%
|
Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
|
| Treasury Auctions Begin |
Tuesday, March 24,
1:15 pm, et
|
None
|
Important. 2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday.
|
| Weekly Jobless Claims |
Thursday, March 26
8:30 am, et
|
210K
|
Important. An indication of employment. Higher claims may result in lower rates.
|
| U of Michigan Consumer Sentiment |
Friday, March 27,
10:00 am, et
|
55.5
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
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Fed Projections
The Federal Open Market Committee’s March 2026 Summary of Economic Projections showed median real GDP growth rising to 2.4 percent in 2026, 2.3 percent in 2027, 2.1 percent in 2028, and 2.0 percent over the longer run. This is an increase from December’s 2.3, 2.0, 1.9, and 1.8 percent. The unemployment rate is projected to edge lower from 4.4 percent in 2026 to 4.3 percent in 2027 and 4.2 percent thereafter, holding at the longer-run estimate of 4.2 percent. PCE inflation is notably higher at 2.7 percent for 2026 (versus December’s 2.4 percent), before declining to 2.2 percent in 2027 and reaching the 2.0 percent target in 2028 and the longer run; core PCE follows the same path.
The median appropriate federal funds rate remains at 3.4 percent by end-2026 and 3.1 percent in 2027–2028, with the longer-run rate revised slightly upward to 3.1 percent from December’s 3.0 percent. Central tendencies narrow around these medians, while full ranges reflect modest dispersion across the 20 participants. Projections for both GDP growth and inflation are stronger than in December, but the policy path is essentially unchanged.
Participants judge uncertainty around their forecasts as higher than the past 20-year average for GDP growth, unemployment, and inflation, while risks are broadly balanced for most variables (with slight downside tilt for growth). Fan charts and historical error ranges (for example, ±1.5 percentage points for 2026 GDP) underscore the wide confidence intervals typical of such projections.
For mortgage borrowers, these numbers point to mortgage rates staying elevated for longer. The Fed’s steady 3.1–3.4 percent policy path and only gradual inflation decline to 2 percent signal no aggressive rate cuts ahead, so 30-year fixed rates are unlikely to drop sharply in the short term.
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