What Spiraling Treasury Yields Mean for Millions of Mortgages
Summary
U.S. Treasury yields recently rose to their highest point in 19 years, causing mortgage rates to increase. The government is trying to lower yields by buying back bonds, but experts say ongoing fiscal challenges and inflation risks will keep borrowing costs high.Key Facts
- The 30-year U.S. Treasury yield rose above 5.3% for the first time since 2007.
- Mortgage rates rose to about 6.75% following the increase in Treasury yields.
- The U.S. Treasury Department plans to double buybacks of longer-term debt to help lower yields.
- Despite buybacks, underlying issues like government borrowing, inflation, and global risks remain.
- Higher Treasury yields make lenders raise mortgage rates to stay competitive.
- The U.S. monthly deficit hit $432 billion in July, a recent record for the month.
- Inflation is still elevated, and the Federal Reserve may raise interest rates again.
- Experts forecast mortgage rates to stay around 6.5% to 6.8% through 2026 and 2027.
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