Hope your week is going well! It has been a big week for rates, so let me break down what happened and why it matters.
Rates climbed for six straight days heading into this week’s Fed meeting, the sharpest jump we have seen since late 2024, and touched their highest point since early last year. Then on Wednesday the Fed did what markets were watching for: it raised its benchmark rate a quarter point, and the vote was unanimous.
What moved the market was not the hike itself; it was the tone. Fed officials signaled at least one more increase is likely before year-end, and the Chair leaned hard on inflation concerns, something markets were not quite ready for. Stocks pulled back on the news while bond yields rose further. This is not just a U.S. story either. Bond yields in the UK, Japan, and France have all climbed to levels not seen in decades, so a lot of this pressure is coming from overseas.
One bright spot worth remembering: the gap between mortgage rates and the 10-year Treasury has held up better than in past cycles, which has kept mortgage rates from rising as sharply as Treasury yields have. Strong retail sales data this week also confirmed consumers are still spending despite the higher rate environment, a genuinely encouraging sign for the economy.
On the homeowner side, a new survey caught my eye. More than half of homeowners are carrying a credit card balance month to month, and many are feeling the squeeze, cutting back on everything from travel to retirement contributions. Here is the good news: a growing number are turning to their home equity to consolidate that higher-interest debt, and HELOC balances have now climbed for seventeen straight quarters.
If credit card interest is quietly eating into your budget, this could be worth a conversation. Moving that balance into your home equity can meaningfully lower what you are paying in interest, though it does convert unsecured debt into debt secured by your home, so it is worth walking through the tradeoffs together before deciding.
If any of this touches your plans, or someone you care about, I would love to talk it through. You are always welcome to send me an email or calling/texting me at 818.307.6072.
