- The average 30-year fixed-rate mortgage surged to 7.12% last week from 6.97%, the highest since May 2024, per the Mortgage Bankers Association.
- The 10-year U.S. Treasury yield rose to 5.12%, which would be the highest since July 2007, extending a bond market selloff that shows no signs of relenting.
- Fed Governor Michael Barr said further policy adjustments are likely needed to ensure inflation comes down to target in a timely fashion.
- Barr attributed housing affordability problems mostly to supply-side factors like local zoning restrictions and weak construction productivity, while noting the Fed's short-term policy rate affects longer-term borrowing rates.
Quotes
“We needed to recalibrate monetary policy to reflect the balance of risks to our mandate goals”
“In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”
“Mortgage rates are generally lower when inflation is lower, and we are working toward that goal.”