Mortgage Rates Climb Above 7% As Hot Inflation Dampens Expectations For Fed Cuts
Portfolio Pulse from Piero Cingari
Mortgage rates have risen above 7% due to hot inflation and reduced expectations for Federal Reserve rate cuts. The average rate for 30-year fixed-rate mortgages reached 7.06%, causing a 10.6% drop in mortgage applications. Inflation data for January showed a rise, leading to adjustments in rate cut expectations and an increase in Treasury yields. The iShares 20+ Year Treasury Bond ETF (TLT) experienced a 4% decline this month, its worst performance since October.
February 21, 2024 | 2:07 pm
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The iShares 20+ Year Treasury Bond ETF (TLT) saw a 4% decline this month, marking its worst performance since October, influenced by rising Treasury yields and inflation expectations.
The decline in TLT's performance is directly linked to the unexpected rise in inflation and Treasury yields, which has led to a reassessment of rate cut expectations and impacted investor sentiment towards long-term Treasury bonds.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90