Overview: Aside from the latest Federal Reserve meeting, which was favorable for mortgage rates, there was not much significant economic news over the past week. As a result, rates ended the week slightly lower.

The movement in mortgage rates mostly took place following the release of the Fed statement on Wednesday afternoon. The Fed shifted more than expected in the direction of dovish (looser) monetary policy in several areas. As widely expected, the Fed made no change in the federal funds rate, but it also reduced its outlook for future rate hikes. Eleven out of 17 Fed officials now think that the Fed will not need to raise rates at all this year, up from just two officials in December. In addition, the Fed announced that it will slow the pace of balance sheet reduction beginning in May and will end the runoff in assets in September. Finally, the Fed lowered its forecast for economic growth in 2019 to 2.1% from 2.3%.

The latest results of the Job Openings and Labor Turnover Survey (JOLTS) report revealed that job openings remained near record levels — around 7.6 million — at the end of January. This was the eleventh month in a row in which the number of job openings exceeded the number of unemployed workers, which is consistent with a tight labor market. The strong wage growth seen in the key labor market report released a couple of weeks ago also suggested that employers increasingly are being forced to compete to attract qualified workers.

Week Ahead

Looking ahead, the Existing Home Sales report will be released on Friday. The New Residential Construction report (also known as Housing Starts) will come out on March 26. The core Personal Consumption Expenditures (PCE) Price Index, the inflation indicator favored by the Fed, will be released on March 29. The British exit (Brexit) from the European Union, which is scheduled for March 29, could influence U.S. mortgage rates.