- A pressured interest rate cut won’t actually lower mortgage rates. It could do the opposite, an economist said. If there is doubt about the central bank’s independence—whether it is politically neutral and committed to its dual mandate of stable prices and maximum employment—it could result in more chaos in the bond market. That would likely push rates on 10-year Treasuries up, and send mortgage rates soaring.
Stock prices spiraled once President Donald Trump unveiled his sweeping tariff regime on so-called “Liberation Day.” But it appeared a bond sell-off caught his attention (although he denies it), and he put some tariffs on ice. That sell-off sent longer-term yields soaring, and as Fortune’s Shawn Tully wrote, Trump “is obsessed with rates on 10-year Treasury bonds” because it influences mortgage rates—and he promised to make America affordable again.
