rewrite this title Weekly Mortgage Rates Rise Following Erratic Tariff News – NerdWallet

Mortgage rates went up for the first time in a month as investors worried about the uncertain future.

The 30-year fixed-rate mortgage averaged 6.62% in the week ending March 13, up 11 basis points from the previous week. A basis point is one one-hundredth of a percentage point. The increase put an end to a three-week winning streak in which mortgage rates had fallen.

Investors gobbled handfuls of ultra strength Tums as they wrapped their heads around the week’s tariff-related flip-flops: Imposition of 25% tariffs on Canada and Mexico, then postponement for a month. A threat to double tariffs on Canadian aluminum and steel, which was withdrawn after Canada said it would jack up the price of cross-border electricity. Then the Trump administration slapped a 25% worldwide tariff on steel and aluminum.

Tariffs could reverse the Federal Reserve’s progress in reducing the inflation rate. If inflation goes up, so will interest rates.

Responding to the erratic tariff policies, the S&P 500 stock index dropped about 4% from March 5 to March 12.

Normally, you would expect mortgage rates to drop when stock prices fall. But that didn’t happen because mortgage companies worry more about inflation than the stock market.

Samir Dedhia, CEO of One Real Mortgage, said the week’s increase in mortgage rates was driven primarily by uncertainty about tariffs.

“If new tariffs drive up costs for goods and materials, inflation could remain elevated for longer than expected, prompting the Federal Reserve to maintain a more cautious approach toward rate cuts,” he said in a statement.

Federal Reserve chair Jerome Powell told an audience at the University of Chicago on March 7 that “we’re still very uncertain about what will be tariffed, for how long, at what level.”

But Powell added that it’s too early to freak out: “The economy’s fine, it doesn’t need us to do anything, really, and so we can wait and we should wait,” he said.

That pretty much sealed the market’s belief that the Fed won’t cut the federal funds rate on March 19.

Meanwhile, core inflation dropped to 3.1% in February, as measured in the consumer price index. Economists had expected 3.2%. But the CPI isn’t the final word. The Fed pays more attention to a different inflation measurement called the Personal Consumption Expenditures (PCE) Price Index. When that number is released in late March, it might not match the CPI’s decline.

“We’ve seen inflation expectations rise and consumer sentiment fall recently as the uncertainty of future policy decisions plays on households’ and businesses’ feelings of financial security,” NerdWallet senior economist Elizabeth Renter wrote. “It is very difficult to make sound financial decisions when you can’t be sure what will happen in the coming weeks or months.”