The stock market gave back earlier gains for the year, and investors sought safety by moving into the Treasury and mortgage markets, which caused this easing phase of interest rates by the first of March 2025. The 10-year note yield (rate) dropped to 4.20%, and the 30-year mortgage rate hit 6.70%.

The Fed only directly controls short-term interest rates. The borrowing costs that matter most for consumers are medium and long-term interest rates. These rates are set in global bond markets by traders who are betting on countless factors, including how high and volatile inflation will turn out to be, the strength of growth and investment, and how much debt the U.S. government issues — and in turn how the Fed will react to all of that.

Though the initial market reaction of economic fears to falling global stock prices, fooled investors buying Treasury and easing rates to their recent lows occurring before the Fed Rate Cut. This is where the technical indicators show their value they indicated bottoming of rates. Since the Fed Cut, the Mortgage & Treasury Rates (Yields) shot significantly higher.

Debt Ceiling and Interest Payments: The ongoing debt ceiling faceoff highlights the underlying issues of US national debt growth and the acceleration of interest costs. The high US Debt is a major inflation factor that lead to high interest rates.

The 10Yr Note, is the benchmark instrument that is analyzed by technical tools. These tools charts & indicators provide an objective and consistent view of the major trend of rates.

Market Review after a Peak Correction

Brief review of mortgage rates moving sharply higher before any Fed Funds changes.

This discusses the upward movements that occurred in the Bond & Mortgage rates prompted by rising inflation seen by the sharp increase in the Consumer Price Index that well exceeded the Fed’s target inflation rate of 2.0%. It is a myth the Fed has ultimate control of consumer & investors interest rates.

An insightful overview that early identified a major up trend of interest rates months before the Fed made their first increase in the Fed Funds Rate. The Past 13 yrs of easy money policy ending, and new cycle to follow is an uptrend for interest rates. Note Mortgage Rates were 3.10% when written.