Ongoing uncertainty could cause rates to stay high, or increase further. For instance, if tariffs cause inflation to reignite, which most experts and Fed officials expect, it could result in higher bond yields and fewer interest rate cuts by the central bank. Both would be bad for mortgage rates.

The European Central Bank paused its most aggressive interest-rate cutting campaign since the global financial crisis as it awaits clarity on President Trump’s tariffs.

The European Central Bank left interest rates unchanged Thursday, pressing pause on an easing cycle that has delivered eight quarter-point rate cuts since last summer.

“Markets are not far away from switching focus from the last cut to the first hike,” Wall said.