Why do mortgage rates rise when the Fed cuts interest rates?
In this video, we break down the critical relationship between the Federal Funds Rate, the 10-Year Treasury Yield, inflation expectations, government debt issuance, and why the bond market — not the Fed — ultimately drives mortgage rates.
Or, read ‘Financial Showdown…When The Fed Cuts Rates And The 10-Year Treasury Yield Rises’ at Substack here: https://open.substack.com/pub/hallmarkabsservice/p/financial-showdownwhen-the-fed-cuts?utm_campaign=post-expanded-share&utm_medium=web
Understanding the dynamic between what the Federal Reserve does and how mortgage rates react is essential for:
• Homebuyers trying to time the market
• Real Estate professionals advising clients
• Mortgage brokers navigating rate volatility
• Investors evaluating housing market trends
• Anyone following inflation, interest rates, and economic policy
Even as the Federal Reserve lowers short-term interest rates, long-term Treasury yields can remain elevated due to:
• Inflation expectations
• Massive U.S. government debt issuance
• Budget deficits
• Investor demand for higher yields
• Geopolitical risks impacting energy prices
• The term premium required by global capital markets
Because mortgage rates typically follow the 10-Year Treasury yield, these forces can keep borrowing costs high even during a Fed easing cycle.
This dynamic helps explain:
• Why housing affordability remains challenged
• Why the Spring real Estate market has been slower than expected
• Why commercial real estate refinancing risk remains elevated
• Why investors continue watching inflation data closely
Read the full analysis here:
Financial Showdown…When The Fed Cuts Rates And The 10-Year Treasury Yield Rises
https://open.substack.com/pub/hallmarkabsservice/p/financial-showdownwhen-the-fed-cuts?utm_campaign=post-expanded-share&utm_medium=web
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Hallmark Abstract Service
You Buy Real Estate… We Protect It.
Michael Haltman, CEO
(516) 741-4723
Meet The Speaker
Michael Haltman is CEO of Hallmark Abstract Service, a New York-based title insurance firm specializing in residential and commercial transactions. With a background spanning Wall Street, fixed-income markets, and commercial real estate Finance, he provides practical insight into housing trends, interest rates, credit markets, and economic forces shaping real estate.
Michael is also the host of the Do You Ever Wonder podcast and serves as Board Chair of the Heroes To Heroes Foundation, supporting combat veterans transitioning to civilian life.
