The yield on U.S. 10-year Treasury notes has reached a new 19-month high, surpassing 4.80% for the first time since January 2025. This increase in long-term borrowing costs, a key benchmark for mortgage rates, suggests that mortgage rates could soon exceed 7%. Markets are pricing in reduced confidence that the Federal Reserve will maintain a pause in rate hikes during its June, July, and September meetings. The probability of a Pause-Pause-Pause scenario across these three meetings has dropped to 39.5%, down from 46% just 24 hours ago, reflecting growing concerns about persistent inflationary pressures.
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