The Fed as expected increased short-term rates by ¼%, so that the Prime Rate now stands at 5%. In their statement the Fed said is growing at a “solid rate” instead of “moderate rate. The Fed predicted that the unemployment rate will fall to 3.6% by year end. Thus, a majority of policymakers are now predicting the Fed will raise short-term rates a total of 4 times this year instead of just 3 times. This means 2 more rate hikes this year.
Legendary hedge fund manager Paul Tudor Jones said last week, “I think we’ll see rates move significantly higher beginning sometime late third quarter, early fourth quarter (2018), and I think the Stock market also has the ability to go a lot higher at the end of the year.”
I can see mortgage rates rising at least ½% in the last half of the year as long-term rates almost have to rise as the Fed raises short-term rates. Also, our economy is the strongest it’s been in a long time.