It was an action-packed week for the housing and mortgage market. Wednesday’s Fed announcement was the highlight, but we also got several economic reports that caused rate volatility. Thankfully, it was mostly the good kind. The week got off to a slightly stronger start with Monday’s only major rate news being updated borrowing estimates from the Treasury Department.  Why would such a thing matter?  Treasuries largely dictate day to day interest rate momentum in the U.S. because they are abundant, simple, and as close to risk-free as it gets.  As such, Treasuries are the universal yardstick for all other debt in the U.S., including MBS, the mortgage-backed securities that have the most direct impact on mortgage rates.  This is why Treasury yields and mortgage rates correlate so well over time. Treasuries can take cues from several sources.  One of the biggest is the change in the outright level of supply.  In other words, how much more debt is the U.S. government issuing in the upcoming quarter?  If that number is higher than expected, it puts upward pressure on rates. Monday’s news from Treasury was fairly palatable and roughly in line with market expectations, which allowed rates to stay steady. Things changed on Tuesday when the Employment Cost Index (ECI) data came out.  This is one of several reports that the Fed has mentioned as being important to the rate outlook recently.  Higher numbers mean higher rates, all other things being equal.  This week’s installment showed Q1 costs at 1.2, up from 0.9 in Q4 and well above the market consensus of 1.0.  Rates hit the highest levels of the week as a result, both in terms of Treasury yields and mortgage rates.