The effects of last week’s increase in mortgage rates were felt across the country and many people aren’t sure what the future holds. The continuing rise in Mortgage Rates was driven by both strong economic data and market sentiment that the Federal Reserve will raise its policy rate higher in 2023 than previously expected. Although Thursday saw rates reach their highest levels, there was some relief on Friday, with a slight improvement.

With the US labor market remaining in a healthy state, and mounting evidence pointing to continued economic strength, it’s looking increasingly unlikely that mortgage rates will take a substantial dive any time soon. This week is sure to have a sizable impact on interest rate predictions, as federal government data on employment figures and job openings surfaces as well as testimonies from notable assets such as Federal Reserve Chair Jerome Powell. While there is no guarantee at this point, it appears certain that rates are expected to continue their upward trend for the foreseeable future.

Three Things: These are the three areas that have the greatest ability to impact rates this week:

1) The Fed: This week promises to be an interesting one for Federal Reserve watchers, as Fed Chair Powell will be testifying before the Senate Banking Committee and the House Financial Services Committee, both on Tuesday and Wednesday respectively. Furthermore, this debate will pave the way to the upcoming FOMC meeting. To get a preview of what discussions may come up in the next FOMC meeting, market participants can also tune into speeches by several Fed representatives this week. To bring all of these experiences together, we also receive the Beige Book on Wednesday — a comprehensive report which combines anecdotes from around America about their respective economic situations. With so much on the plate it’s no wonder that Friday marks the start of their media blackout period!

2) Jobs: This week is sure to be an exciting and busy one for economic observers, as we get a ton of jobs and wage related data. From JOLTS, measuring job openings and turnover, to ADP Payrolls giving us a glimpse into private sector hiring activity, each of these pieces of data provide valuable insight into the current state of the labor market. Things will really come to a head on Big Jobs Friday when we get Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, U6 Underemployment Rate, Labor Force Participation Rate and Average Weekly Hours all in one day – an exciting collection of information for all those analysts out there!

3) Central Banks: Central Banks are a fundamental part of the global economy and play an important role in setting interest rates, which actively affects monetary policy. One of the most influential Central Banks are the Reserve Bank of Australia, Bank of Canada, and Bank of Japan; each responsible for providing insight into their country’s monetary policy throughout the year. Each Central Bank releases key interest rate decisions and policy statements that help inform the public on major economic movements. These statements can cause significant market movements since they affect capital flow in the economy and inflation expectations. As these banks remain powerful influences over the economic picture, it’s important to evaluate what they say if you’re thinking about investing or launching any business plans.

Technicals:

The UMBS 5.5 coupon (MBS or mortgage backed securities) at 99.68

The 10yr Treasury yield at 3.95