--- title: What's Happening in The Markets? description: "Much like the Fed did in the first half of the year, they are \"jawboning\" the market by saying they will continue to raise rates and be very aggressive in doing so. The only rate they can raise is the Federal Funds Rate." image: https://info.carringtonmortgage.com/hubfs/IMAGES/Market%20Trends/Market%20Trends_2022.09.06.jpg --- [Skip to content](https://info.carringtonmortgage.com/knowledge-base/whats-happening-in-the-markets#main-content) ![bell icon](https://info.carringtonmortgage.com/hubfs/raw_assets/public/Templates/2022/svg/Alert-Notifications-Icon.svg) [![Carrington Mortgage Services](https://info.carringtonmortgage.com/hs-fs/hubfs/carrington_logo_final_2col_rgb.png?width=250&height=57&name=carrington_logo_final_2col_rgb.png)](https://www.carringtonmortgage.com) - [About Us](https://www.carringtonmortgage.com/our-mission) - [Careers](https://www.carringtonhc.com/careers) - [Investors](https://www.carringtonhc.com/investors) - [Contact Us](https://www.carringtonmortgage.com/contact-us) [Recent Transfer](https://www.carringtonmortgage.com/new-customers) [Customer Login](https://www.carringtonmortgage.com/login) MAKE HOME WORK Manage My Home arrow-down-anticon/submenu Manage My Mortgage arrow-down-anticon/submenu Learning Center MAKE HOME WORK Manage My Home arrow-down-anticon/submenu - I Am Ready to Start - [Buy a Home](https://www.carringtonmortgage.com/home-loans/buy-a-home/check-existing-customer) - [Refinance My Home](https://www.carringtonmortgage.com/home-loans/refinance-a-home/refinance-step) - What Loan Is Right For Me? - [Purchase Options](https://www.carringtonmortgage.com/home-loans/buy-a-home) - [Refinance Options](https://www.carringtonmortgage.com/home-loans/refinance-a-home) - What is Involved in Getting a Loan? - [The Loan Process](https://www.carringtonmortgage.com/tools/loan-process) - I Want to Calculate... - [Monthly Mortgage Payment](https://www.carringtonmortgage.com/tools/calculators) - [Home Affordability](https://www.carringtonmortgage.com/tools/calculators#affordability) - [Cost to Refinance](https://www.carringtonmortgage.com/tools/calculators#refinance) - [Loan Comparison](https://www.carringtonmortgage.com/tools/calculators#comparison) - Partner With Us - [Home Builders](https://www.carringtonmortgage.com/Partner-with-Us/home-builders) - [Real Estate Agents](https://www.carringtonmortgage.com/Partner-with-Us/real-estate-agents) - I Have Questions - [Need an Expert](https://www.carringtonmortgage.com/find-an-expert) Manage My Mortgage arrow-down-anticon/submenu - I Just Had My Loan Transferred Here - [New to Carrington Onboarding?](https://www.carringtonmortgage.com/new-customers) - How Do I Repay My Loan - [Payment Options](https://www.carringtonmortgage.com/payment-options) - [Payoff Statement](https://www.carringtonmortgage.com/payoff-statements) - What Are Servicing Fees? - [See the Schedule of Fees](https://www.carringtonmortgage.com/schedule-of-fees) - I Need Help With - [Mortgage Assistance](https://www.carringtonmortgage.com/mortgage-assistance) - [Disaster Assistance](https://www.carringtonmortgage.com/disaster-assistance) Learning Center - [About Us](https://www.carringtonmortgage.com/our-mission) - [Careers](https://www.carringtonhc.com/careers) - [Investors](https://www.carringtonhc.com/investors) - [Contact Us](https://www.carringtonmortgage.com/contact-us) --- Recent Transfer --- Customer Login [Work Trends](https://info.carringtonmortgage.com/knowledge-base/tag/work-trends) # What's Happening in The Markets? [CMS Marketing](https://info.carringtonmortgage.com/knowledge-base/author/cms-marketing) [![Share on Facebook](https://info.carringtonmortgage.com/hs-fs/hubfs/EHO/facebook.png?width=24&name=facebook.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://info.carringtonmortgage.com/hs-fs/hubfs/EHO/linkedin.png?width=24&name=linkedin.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://info.carringtonmortgage.com/hs-fs/hubfs/EHO/twitter.png?width=24&name=twitter.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=What%27s%20Happening%20in%20The%20Markets%3F) [![Share on Pinterest](https://static.hubspot.com/final/img/common/icons/social/pinterest-24x24.png)](http://pinterest.com/pin/create/button/?url=https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Dpinterest&media=https%3A%2F%2Fcms.carringtonhomeloans.com%2Fhubfs%2FEHO%2Fpinterest.png) [![Share on Email](https://info.carringtonmortgage.com/hs-fs/hubfs/EHO/email.png?width=24&name=email.png)](mailto:?subject=Check%20out%20https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Finfo.carringtonmortgage.com%2Fknowledge-base%2Fwhats-happening-in-the-markets%3Futm_medium%3Dsocial%26utm_source%3Demail) ![](https://info.carringtonmortgage.com/hubfs/IMAGES/Market%20Trends/Market%20Trends_2022.09.06.jpg) Last Week in Review: What's Happening in The Markets? The financial markets had a rough week, with stocks falling and rates spiking since Fed Chair Powell spoke in Jackson Hole. Let's walk through what happened and look into the week ahead. **"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses." Fed Chair Jerome Powell – Friday, August 26, 2022.** This line set off the selloff in stocks and bonds and continued throughout this week. The 2-Yr note which attempts to mimic fed interest rate activity, spiked to the highest level in 15 years. Mortgage-backed securities (MBS), which are where home loan rates are derived, fell sharply causing home loan rates to rise to the highest levels since June. And in a sign that a recession is here or forthcoming, the 2 and 10 year note yields remained deeply inverted suggesting pain is here and will likely continue. On top of the Fed Chair's tough talk, we also had several Fed officials talking very hawkish which further stoked the rate hike fears. As of today, the chance of a .75% rate hike at the end of September is essentially fully priced in. This means that the Fed Funds Rate, which is an overnight rate, will be higher than the 10-year Note yield. This is typically a negative sign for the economy. And if this were not enough pain for the bond market, we are now into September, where the Fed is slated to ramp up balance sheet reduction to the tune of $95B per month. This means the Fed will be providing even less support for the bond market. There is no clear formula on what the impact of balance sheet reduction will be on the economy. This adds to the uncertainty, volatility, and pain we are seeing in the financial markets. **Bottom line:** *Much like the Fed did in the first half of the year, they are "jawboning" the market by saying they will continue to raise rates and be very aggressive in doing so. The only rate they can raise is the Federal Funds Rate. With recession fears escalating, there will be a limit to how high interest rates will go and we are watching the June rate peak as a ceiling for 2022.* ## Related Articles [![](https://info.carringtonmortgage.com/hubfs/IMAGES/Market%20Trends/Market%20Trends_2022.09.12.jpg)](https://info.carringtonmortgage.com/knowledge-base/financial-markets-attempt-to-stabilize) [Work Trends](https://info.carringtonmortgage.com/knowledge-base/tag/work-trends) ### [Financial Markets Attempt to Stabilize](https://info.carringtonmortgage.com/knowledge-base/financial-markets-attempt-to-stabilize) Last Week in Review: Financial Markets Attempt to Stabilize [CMS Marketing](https://info.carringtonmortgage.com/knowledge-base/author/cms-marketing) [Read More](https://info.carringtonmortgage.com/knowledge-base/financial-markets-attempt-to-stabilize) [![](https://info.carringtonmortgage.com/hubfs/Market_Trends_Assets_BLOG-1.jpg)](https://info.carringtonmortgage.com/knowledge-base/fed-pauses-rates-decline) [Work Trends](https://info.carringtonmortgage.com/knowledge-base/tag/work-trends) ### [Fed Pauses, Rates Decline](https://info.carringtonmortgage.com/knowledge-base/fed-pauses-rates-decline) This past week, the Federal Reserve did not raise rates, and long-term rates, like mortgages, declined to the best levels in a month. Let's discuss what happened and... 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