Mortgage rates have reached their lowest levels in four months after this week’s inflation data. Despite this progress, Federal Reserve (Fed) officials have continued to express their intention to keep rates high “for as long as possible.” The study shows that the Consumer Price Index (CPI) has been a major factor in the volatility of mortgage rates over the past year, and that recent reports indicate progress on the inflation front, giving hope for the future. However, the Fed is concerned about repeating a mistake from the 80s when it cut rates too soon and inflation increased. Therefore, they are continuing to advocate for more rate hikes and keeping rates high as a means of controlling inflation. The market sees the Fed being able to hike two more times, but by a smaller amount than before. The Fed’s next rate hike decision will be announced on February 1st and the market will be closely monitoring economic data for any signs of inflation resurgence or unemployment.