Front entrance of the Marriner S. Eccles Federal Reserve Board Building in Washington, D.C.

Image source: Federal Reserve Board of Governors

The average 30-year mortgage rate fell 1 basis point to 4.04% on Wednesday, which equates to a $479.72 monthly payment per $100,000 borrowed (a basis point equals one hundredth of a percentage point). A month ago, the equivalent payment was higher by just $1.16.

The average 15-year mortgage rate rose 2 basis points to 3.22%, equating to a $701.21 monthly payment per $100,000 borrowed. A month ago, the equivalent payment was higher by $0.97.

Rate (National Average)

Today

1 Month Ago

30-year fixed jumbo

4.42%

4.56%

30-year fixed

4.04%

4.06%

15-year fixed

3.22%

3.24%

30-year fixed refi

4.07%

4.10%

15-year fixed refi

3.24%

3.26%

5/1 ARM

3.19%

3.39%

5/1 ARM refi

3.26%

3.59%

5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED 5-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.

Mortgage rates are roughly unchanged, as the Federal Reserve steps on a new tightrope

With the political tumult that has accompanied the new administration, we can safely say one thing in 2017: It's not all about the Federal Reserve anymore. On Wednesday, the central bank's rate-setting committee, the Federal Open Market Committee (FOMC), concluded the second and final day of its January/February meeting, with no change to its key policy interest rate, the federal funds rate.

In the aftermath of the financial crisis, the Fed has become well practiced at tightrope walking, but the Trump administration has presented it with a new tightrope: On one hand, Donald Trump's election does appear to have stoked "animal spirits" in the economy; the FOMC itself noted in its statement that "[m]easures of consumer and business sentiment have improved of late." That suggests a pickup in economic activity and price inflation could be in the cards; as such, the Fed could be forced to adopt a more hawkish stance.

On the other hand, it's clear it's not business as usual in the White House, with a correspondingly higher level of uncertainty in terms of fiscal and trade policy. In that context, the Fed may want to leave itself plenty of room to maneuver until the administration's plans are better understood.

It's game on as we wait for Friday's employment-situation report for last month, which will provide some crucial data to try to gauge the actual economic impact of those "animal spirits." 

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