Fed Cuts: Why Mortgage Rates May Not Budge

Bond markets face a conundrum in 2026, with long-term interest rates potentially remaining high despite Fed rate cuts. This could hinder homebuyers and businesses, as the ten-year Treasury yield, which influences mortgage rates, may not decrease significantly. Economists at ING predict three scenarios: a moderate increase to 4.5% due to inflation, a drop to 4.25% as housing cools, or a recession-driven decrease to 3%. The base case suggests borrowing costs will remain elevated, challenging the Feds ability to control rates throughout the year.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.