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Your Evening Briefing: The Fed’s Painful Progress on Inflation

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Homebuyers are facing a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade. Above, a neighborhood in El Cerrito, California.

Homebuyers are facing a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade. Above, a neighborhood in El Cerrito, California.

Photographer: David Paul Morris/Bloomberg

The US Federal Reserve’s historic if belated war on inflation is already yielding some significant results, and while they’re arguably part of the plan, the fallout means consumer and corporate pain in the immediate term. Credit-card rates have soared past 20%, mortgage costs have climbed to the highest since 2008 and companies are having a harder time borrowing. Economists are still debating if the Fed’s battle against high prices will cause a recession, with President Joe Biden contending it isn’t the fait accompli panicky Wall Street CEOs say it is. At least those rising mortgage rates have a silver lining: The waiting lists for new houses in hot locales are gone. Homebuilders, surprised by suddenly cooling demand, are doing something they haven’t done in years: slashing prices

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