Mortgage rates were already close to the highest levels in more than 20 years yesterday--an unpleasant milestone that was easily surpassed after today's Job Openings data came in much higher than expected.
Interest rates are always dependent on the economy and inflation--sometimes more than others. Even without the Federal Reserve, rates would still need to pay attention to these things and stronger econ data would still imply higher rates, all other things being equal.
But the Fed's role as short-term rate setter only amplifies the volatility produced by key economic data. This is especially true in recent months as the Fed reiterates a "data dependent" stance time and again. It is also especially true for reports the Fed has specifically called out. Today's report is one of only a handful.
Job openings have been declining since March, and that's a good thing for rates, technically, but the decline hasn't been as quick as expected. Then days like to day cast doubt on the decline. Openings jumped to 9.61m from 8.92m previously. They'd need to be under 8m for the Fed to feel that its policies were having the desired impact on the labor market (and thus, on inflation prospects).
Much of the rapid rise in rates over the past two weeks has been in anticipation of this week's economic data. Traders were bracing for bad news. Today delivered. And now the market is bracing for more of the same in the remainder of the week. Risks are biggest on Friday morning when the Employment Situation (the bigger, more timely jobs report) comes out.
The average mortgage lender is now offering rates over 7.7% for top tier conventional 30yr fixed scenarios. Many borrowers are now seeing 8% rates (or seeing high upfront costs required to buy one's rate down into the 7's).
If the rest of this week's data is similarly strong, rates could go higher before they catch a break. Either way, breaks do indeed depend on the data.