Overview: Two major central bank meetings caused some volatility in mortgage rates over the past week. Neither ended up having much net effect, however, and mortgage rates ended the week with little change.

As expected, the U.S. Federal Reserve made no change to the federal funds rate at its meeting on Wednesday. Of note, the Fed statement said that officials expect to begin to reduce its holdings of Treasury securities and mortgage-backed securities (MBS) “relatively soon.” Investors think that this policy change may be announced as early as the next meeting on September 20. The statement also slightly changed its description for inflation as “running below 2%” instead of “running somewhat below 2%.” Concerns that the Fed might be more hawkish had caused mortgage rates to rise on Tuesday, but the increase was reversed on Wednesday when the statement contained no surprises.

While the Fed is currently holding its balance sheet steady and plans to soon begin to shrink it, the European Central Bank (ECB) is still adding to its portfolio. At the ECB meeting on July 20, investors were hoping to learn more about the ECB’s plans for its massive bond purchase program next year. Investors were disappointed by a lack of new information, though, as ECB President Draghi only provided the vague guidance that the discussion about when to begin scaling back the program should take place "in the fall."

The housing data released this week revealed that home sales have been holding fairly steady in recent months, despite a lack of inventory in many markets. In June, sales of previously owned homes decreased a little from May, but they still were higher than a year ago. Total inventory of homes for sale fell slightly to a 4.3-month supply, and it was 7% lower than a year ago. In addition, the median existing-home price was 7% higher than a year ago. Week Ahead

Looking ahead, the Durable Goods Report will be released on Thursday. The first reading for second quarter Gross Domestic Product (GDP), the broadest measure of economic growth, will come out on Friday. The core Personal Consumption Expenditures (PCE) Price Index, the inflation indicator favored by the Fed, will be released on August 1. The Institute for Supply Management (ISM) Manufacturing Index also will come out on August 1, and the next Employment Report will be released on August 4.