Good afternoon and welcome to Markets Desk. Here is what is moving markets right now.
Treasury yields are surging and posing a serious challenge for whoever leads the Federal Reserve next. Markets are pricing in a firmer hand on inflation, but with yields climbing and growth signals still mixed, the path for policy tightening is far more complicated than the bond market is letting on.
That pressure in the long end of the curve is feeding directly into housing. The thirty-year fixed mortgage rate is pushing toward levels not seen in years, and some analysts are no longer dismissing eight percent as a ceiling. With the ten-year Treasury moving sharply higher, affordability is taking another hit just as the market was hoping for relief.
The dollar is reflecting all of this in real time. The dollar index climbed to a one-and-three-quarter-month high today, supported by a surprise drop in weekly jobless claims to a two-month low and stronger-than-expected new home sales data. Hawkish commentary from Fed officials added further fuel, reinforcing the view that rates are staying higher for longer.
That is the tape. Markets Desk, signing off the floor.
