As expected, the Fed raised policy rates 0.25% at this month’s FOMC meeting. Bond yields jumped on the news, pressuring mortgage rates higher.

The U.S. dollar is at the highest level since 2003, and stocks continue to hit all-time highs. Strong economic activity contributes to mortgage rates increasing.

The Fed is expected to continue to raise policy rates in 2017, possibly up to three times. Rising inflation and a tightening job market support this speculation.