A Fed rate hike could actually be good news for mortgage rates.

In this episode of The RE Source, we break down why that idea isn’t as backwards as it sounds. The Fed controls a short-term interest rate, while mortgage rates are influenced much more by longer-term bonds like the 10-year Treasury and mortgage-backed securities.

We also explain why the bond market is paying such close attention to inflation, why longer-term bonds may react differently than short-term rates, and how a Fed hike could potentially help mortgage rates move lower if investors believe inflation is finally being taken seriously.

Watch the full episode for a simple breakdown of what the Fed, inflation, Treasury yields, and mortgage rates are signaling right now.

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