by Wolf Richter
Wolf Street
Is this spread heading to what happened in the 1970s and 1980s when the Fed battled blow-out inflation?
The average 30-year fixed mortgage rate tracks the 10-year Treasury yield, running roughly in parallel but higher. It tracks the 10-year yield because the average 30-year mortgage gets paid off in just under 10 years, either through the sale of the home, or through a refi. But they don’t move in lockstep, and the difference between the two – the spread – has been widening sharply, with mortgage rates suddenly rising much faster than the 10-year yield.