Mortgage rates are heavily influenced right now by speculation of when and how much the Fed will cut its policy rate this year. Last week mortgage rates moved higher as markets started to give up on the idea that the Fed will have to start cutting its rate in March to head off a recession.

Although starting the week off a little bit better than Friday, mortgage rates could move higher this week if we continue to see markets give up on a March Fed rate cut. The likely best case scenario is that rates hold steady, because it is unlikely they will improve much from here this week.

- Economic data: Thursday brings the preliminary 4th qtr GDP, along with unemployment claims. Friday we get the PCE inflation data, the Fed's favored inflation gauge, which could influence rates to end the week.

- Fed rate cuts: Markets have been pricing in a Fed rate cut in March the last few weeks, which helped mortgage rates fall from October highs. However, markets are finally listening to Fed members who say a March cut is unlikely, causing rates to creep up, but there is room for rates to move higher yet.