U.S. interest rates are soaring and potentially signaling the end of an era. For financial markets, higher benchmark Treasury yields are encouraging a swift rotation away from expensive growth stocks and into shares of companies with more stable cash flows. For the broader economy, it’s a return to something resembling normal after the Federal Reserve slashed the cost of borrowing to record lows in the wake of the Covid-19 pandemic.
One area where Wall Street and Main Street converge is the red-hot U.S. housing market. The latest Freddie Mac data released Thursday showed the average 30-year mortgage rate increased 11 basis points to 3.56%, the highest since March 2020 and the fourth consecutive weekly jump. The move follows a lurch higher in 10-year Treasury yields as bond traders price in more aggressive Fed policy tightening.