While weeks in 2022 have been terrible for mortgage rates, we’ve always been able to say “at least it wasn’t as bad as that one week in 2013.” We can’t really say that anymore. Sharply higher rates out of the gate on Monday, a few hopeful days mid-week, then another terrible day on Friday. Why is all this happening? It’s both simple and complicated. The simple part of the explanation has to do with the Federal Reserve (the Fed) making several unexpected adjustments to its policy outlook. Fed policy involves setting the key overnight lending rate in the US as well as deciding how to buy and sell large amounts of certain bonds. In addition to US Treasuries, those “certain bonds” include mortgage-backed-securities ( MBS ), which directly dictate mortgage rates. As such, the Fed bond buying outlook has a very big impact on mortgage rates. If the Fed gives the market a reason to expect smaller MBS purchases, rates rise. The bigger the surprise, relative to previous expectations, the bigger the reaction in the mortgage market. Starting in November , the Fed began reducing the size of the bond purchases that began at the start of the pandemic. This was bound to happen at some point, but November was a bit earlier than some of the market expected. As a result, MBS suffered . Then in December , the Fed announced it would decrease MBS purchases at a faster pace. This wasn’t really the end of the world at the time, because even after the Fed completely eliminated its scheduled bond purchases, they would still be reinvesting the proceeds from previous investments.