US Mortgage Rates Breach 6%

Photo: AP [via Al Jazeera]

The Facts

  • On Thursday, mortgage-finance giant Freddie Mac reported that the US's 30-year fixed mortgage rate increased to 6.02% — up from 5.89% last week and 2.86% a year ago — breaking the 6% threshold for the first time since the 2008 market housing crash.

  • This comes as the US is facing its worst inflation in 40 years, and follows a key inflation reading on Tuesday that revealed that, although inflation has slowed for a second month due to retreating gas prices, the cost of other essentials has increased.

The Spin

Establishment-critical narrative

Although the Fed doesn't set mortgage rates, its actions influence them. The central bank waited too long to cool inflation, and now the housing market is paying the price: mortgage rates are rising faster than the news can keep up with - increasing pressure on an economy already tormented by relentless inflation.

Pro-establishment narrative

The process of bringing down inflation is unpopular and pain-inducing, but necessary. There is broad consensus among Fed bankers and economists that it's time to increase quantitative tightening to rein in inflation. The Fed is acting well within its mandate to try and tamp down economic pressures.

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