August 23rd, 2013 12:32 PM by Jonathan White
It was a volatile week for mortgage rates. The FOMC Minutes suggested that the Fed will begin to taper its bond purchases in the near future as expected, but a surprising decline in the New Home Sales data made that outcome less certain. After the offsetting influences, mortgage rates ended the week with little change.
The FOMC Minutes from the July 31 Fed meeting were released on Wednesday, but they did little to remove the uncertainty about when the Fed will begin to scale back its bond purchase program. The main takeaway from the Minutes is that Fed officials were split at the meeting about the timing for the taper to begin. Fed officials agree that the decision should be based on the performance of the economy, but they diverge on what constitutes sufficient strength. Bottom line, though, is that there was nothing in the Minutes to contradict investor expectations that the Fed will begin to taper in September or October, and mortgage rates rose after the release of the Minutes.