Mortgage Rates up again 9-16

Another sell-off in U.S. Treasury securities on Friday led to the biggest one-week decline in prices in more than two months. Bond traders relegated several friendly economic reports to the back burner and dwelled on signs of inflation and concerns over the issuance of additional government debt, which led to aggressive selling. In addition, the steady decline in oil prices weighed on Treasuries, as lower energy prices are not as likely to slow the economy as high prices were. When the markets closed, the yield on the benchmark 10-year note was up 14 basis points from a week ago, settling at 4.26 percent, while the yield on the long bond, which is most affected by inflation, climbed 17 basis points during the week. The spike in yields, which move in the opposite direction of prices, forced mortgage lenders who base their rates on yields to raise them on most mortgage products.

Coming Up:

The week of September 19 has little to offer in the way of economic reports, but the Tuesday meeting of the Fed will more than make up for it. Although most insiders expect an eleventh straight 25-basis-point increase, there is no clear consensus about future moves. Will the Fed pause at the Nov. 1 meeting if October economic data point to slowing? Or, will they continue in their mission to ward off inflation? The financial markets are hoping for answers to these questions in the accompanying statement. Also due on Tuesday are Housing Starts and Building Permits for August.

Over the weekend and into Monday mortgage rates will likely continue their climb in order to keep pace with today's steep rise in Treasury yields.