For the second time this year, the Federal Reserve has eased its benchmark lending rate by .25 basis points. Remember, that does not have a direct effect on your mortgage rate, but it may affect it indirectly as banks pass on their savings to consumers.

The trade war between the United States and China continues to drive monetary decisions by the Federal Reserve as it battles against slowing global growth. The U.S. economy is still in good shape and the latest jobs report have shown employment is high, but the global economy combined with trade issues have seemed to force the Fed into action. 

It was a rollercoaster this week for the Federal Reserve as it had to push cash into the markets, called a money market operation, to help curb the spike in short-term interest rates. The Fed enacted another operation Wednesday in order to bring short-term rates down from the 10% rate it hit earlier in the week. That actually pushed the Fed's benchmark interest rate to 2.3%, above the benchmark high of 2.25% it set in July. 

As the Fed has cut overnight lending rates, mortgage rates for homebuyers have jumped back up. This week the 30-year fixed-rate mortgage average jumped up to 3.73%. That's nearly .25% higher than we saw just two weeks ago. Economic data pointing to a stronger economic picture helped push rates higher. If you follow the trajectory of the 10-year Treasury note yield, you can typically get a good idea of where mortgage rates are going. 

Housing activity has finally shown signs that it's gaining momentum as purchase applications are up 15% from a year ago. Housing starts also hit a 12-year high in August, with single-family starts increasing by 4.4%. Building permits also increased by 7.7%, which was above expectations, with a 4.5% increase in single-family permits. That data had Goldman Sachs boosting its Q3 Gross Domestic Product estimate by one tenth to 2.2% growth.