Mortgage ratesÃ‚Â held steadyÃ‚Â today, on average, despite moderate improvements in underlying bond markets. Ã‚Â Typically, bond market improvement results in comparable improvement for mortgage rates. Ã‚Â The groundholding is the latest evidence of massive anxiety on the part of lenders ahead of tomorrow's big Fed announcement. Ã‚Â Lenders don't want to be on the hook for low rates if the Fed happens to send rates screaming higher tomorrow.
To reiterate yesterday's point, we already know the Fed will hike. Ã‚Â Markets are also expecting the Fed to accelerate its forecasts for future rate hikes (this is what pushed rates higher in December, by the way--not the rate hike itself). Ã‚Â Unfortunately, we can't pinpoint exactly how well-prepared markets are for such an acceleration.Ã‚Â