US mortgage rates spike ahead of Fed meeting

U.S. mortgage rates rose to the highest level in 2017 ahead of a Federal Reserve meeting that will decide the direction of short-term interest rates.

According to Freddie Mac, 30-year fixed-rate mortgages now ask 4.21 percent per year on average, up from 4.1 percent a week ago. The rate for 15-year loans rose to 3.42 percent, up from 3.32 percent, Bloomberg reported.

The Federal Reserve’s decision-making body will meet on March 14 and 15, and Fed chair Janet Yellen has hinted it may decide to raise its benchmark short-term interest rate, the federal funds rate. Higher short-term rates tend to push up mortgage rates.

“The economy has essentially met the employment portion of our mandate and inflation is moving closer to our 2% objective,” Yellen said in a speech earlier this month.  [Bloomberg] — Konrad Putzier