For the next few weeks, all the attention is focused on the Federal Reserve for any sign of how interest rates will move the rest of the year. This week, we got some clarity when minutes from the Fed's January meeting showed that officials are confident about raising interest rates gradually, even as the economy grows faster than they expected.

During its meeting last month, the central bank increased its growth forecast and described U.S. economic growth as "above trend," citing Congress' $1.5 trillion tax plan, increased federal spending and the global economic outlook as boosts to the country's economic performance.

Fed officials also seemed sure that inflation will hit their 2 percent target. Inflation, the measure of the rise of goods and services in the economy, has been disappointingly sluggish over the last several years.

That trend reversed course earlier this month when data last week showed that inflation is on the mend and accelerating rather quickly. The speed caused investors to panic, throwing the stock market into momentary tumult until conditions began to stabilize again.

The Fed expects to raise interest rates three times this year, the first of which analysts expect to happen when policymakers meet in March. But now that the economy is beginning to feel the effects of tax reform — and soon will see the impact of the government's $300 billion spending plan — some Wall Street economists question whether the central bank will hike rates four times this year.

Federal-funds futures, which traders use to place bets on the path of interest rates, showed a 29 percent chance of four rate hikes this year, up from 25 percent, according to CME Group. Bond prices fell and yields rose after investors probed the meeting minutes Wednesday and decided the central bank's tone was more hawkish than anticipated. Yield on the 10-year Treasury rose to 2.943%, its highest closing level since January 2014.

What worries investors most is the Fed's belief that inflation will continue its rapid upward momentum. Inflation devalues the purchasing power of bonds. Investors typically move away from assets that lose value over time. Such action would push down the price of bonds, which pushes up Treasury yield and mortgage rates.

By Thursday, U.S. stocks began to increase after another wild week in the market thanks to investors' concerns over whether the Fed will hit the gas on raising interest rates to manage the growing economy. Those concerns began to ease and saw the Dow Jones Industrial Average gain 225 points and the S&P 500 rise by 0.5 percent.

As for a fourth rate hike, we can cool speculation, for now. During a speech in Tokyo Thursday, Fed Governor Randal Quarles advocated for the Fed's gradual rate increases and stressed that the central bank needs to be patient.

“Against this economic backdrop, with a strong labor market and likely only temporary softness in inflation, I view it as appropriate that monetary policy should continue to be gradually normalized,” he said.

Existing home sales plummet

 Low inventory and soaring prices continue to constrict the housing market, forcing existing home sales to fall to their lowest annual decline in more than three years.

Total existing home sales in January decreased 3.2 percent to 5.38 million units sold, down from 5.56 million in December, according to the National Association of Realtors. They also declined 4.8 percent on a year-on-year basis, creating the biggest year-on-year drop since August 2014.

The precipitous decline was unexpected as economists expected homes sales to increase to 5.60 million units, given the surging demand for housing across the country.

But as has been the issue for awhile now, the housing market is souped with demand but bereft of supply. "The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S.," said Lawrence Yun, the NAR's chief economist.

As the labor market and wages continue to improve, housing demand will continue to build. Home prices now outpace wage growth. Pair this with rising mortgage rates, and it's possible we'll see only modest home sales growth this year.

Still, it's early. U.S. home construction jumped 9.7 percent in January, the highest uptick since fall 2016, and building permits rose 7.4 percent. As the economy continues getting stronger, building on new homes is going to gather steam, raising hopes that it might help offset tightening supply.

In other mortgage news…

• Americans' outlook for the economy improved in February to the second-highest level since March 2002, according to the Bloomberg Consumer Comfort Index. Thirty-eight percent of survey respondents said the national economy is getting better.
• Mortgage applications fell 6.6 percent for the week ending Feb. 16 as mortgage rates continued to rise, according to the Mortgage Bankers Association.
• Mortgage rates rose for a seventh consecutive week, hitting their highest point in nearly four years, according to Freddie Mac's Primary Mortgage Market Survey. Rates continue to follow the Treasury's expectation that the Federal Reserve will tighten borrowing costs, and that inflation will continue to rise.