After a white-hot streak during the first two years of the pandemic, business has started to evaporate for mortgage lenders following the Federal Reserve’s rate hikes. US mortgage rates are at levels last seen more than a decade ago. That’s hurting affordability for first-time buyers, slowing sales of previously owned homes and making it unattractive to refinance. Even still, home prices are proving resilient—and while that’s good for homeowners, it’s bad news for the Fed. With housing a key driver of inflation, John Authers writes in Bloomberg Opinion that the central bank has to turn down the heat on demand (and the broader consumer economy) without causing an “accident” for firms that rely on mortgage finance. Can Jerome Powell do it? Authers says “it’s not going to be easy.”
Russia defaulted on its external sovereign bonds for the first time in a century, the culmination of global sanctions over its invasion of Ukraine. Because of the soaring price of energy, the Kremlin does have the means to pay its debt, just not the route—and any path forward remains uncertain. With Vladimir Putin’s war in its fourth month, Ukraine said it has driven Russian troops from the strategically critical Snake Island, and Turkey dropped its objection to Sweden and Finland joining NATO.