The Weekly Financial Update with Matt Grant (11/29)

Greetings,

As we headed into the Thanksgiving holiday, mortgage rates were climbing upward. Inflationary pressure showed no signs of slowing, with the PCE headline and core readings moving even higher. The market was somewhat reassured when Fed Chair Jerome Powell was re-nominated. Odds began to grow that the fed might need to accelerate its taper and raise rates sooner than previously thought. That all changed on Friday. The Omicron variant of the COVID-19 pushed stock markets down dramatically, and money flowed into bond markets pushing mortgage rates downward quickly. While experts repeatedly cautioned that we don’t completely understand the impact or risks of this latest “variant of concern,” markets took a pessimistic view. Over the weekend, the variant was confirmed in Europe and North America. While markets are likely to recover this week, news regarding this latest variant could be the biggest driver of mortgage rates. The more it appears that the variant may impact future economic activity, the more likely we are to see rates moving downward.