In addition, because banks had raised interest rates on all of their (variable rate) interest-only loans, existing customers had an incentive to switch their loans from interest-only to P&I terms before their scheduled interest-only periods ended.
Long-term rates did not react strongly to the reinvestment discussions in the minutes for the FOMC’s March and May meetings, which led market participants to bring forward their expectations about the starting date for this process by about six months (figure 7).