Do current mortgage interest rates reflect the FED interest rate increase that’s upcoming?

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I’m in the process of trying to buy a first home and know that Powell has a meeting on 5/2 where he has signaled that interest rates will be rising by a half basis point. My question is are the rates I see today ~5.5% already taking that bump into account, or can I expect to see rates jump sharply on 5/2 after the announcement is made?

I know stocks would be considered “priced in” but do mortgage rates behave the same way?

Posted Apr 25, 2022, 7:30 PM UTC

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Werewolfdad•4 yr. ago

My question is are the rates I see today ~5.5% already taking that bump into account, or can I expect to see rates jump sharply on 5/2 after the announcement is made?

Probably both.

Fed funds rate doesn't influence mortgage rates. That's more then 10 year treasury.

pocketfoolOP•4 yr. ago

Ah good point, I think I’m combining the two interchangeably when I shouldn’t. Correlated but maybe not directly tied together. Thank you

Werewolfdad•4 yr. ago

Correlated but maybe not directly tied together

Pretty much.

harrison_wintergreen•4 yr. ago

the bond market has more sway over mortgage rates than does the fed funds rate for banks. and bond yields have been spiking up recently.