These numbers are bad news if you’re trying to buy or refinance a house

May 2, 2022, 12:25 PM | Updated: Jun 8, 2022, 3:15 pm

The Marriner S. Eccles Federal Reserve Board building is seen in Washington, DC, March 16, 2022. - ...

The Marriner S. Eccles Federal Reserve Board building is seen in Washington, DC, March 16, 2022. - The Federal Reserve is expected to announce the first interest rate increase since the Covid-19 pandemic began at the conclusion of its policy setting meeting later today. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)

(Photo by SAUL LOEB/AFP via Getty Images)

(CNN) — Bad news for anyone trying to buy a house or refinance an existing loan: The yield on the benchmark 10-year US Treasury note, which influences how much consumers pay for mortgages and a variety of other loans, briefly topped the 3% level Monday for the first time since December 2018.

Long-term bond yields have nearly doubled this year, largely due to worries about inflation and the likelihood of supersized interest rate hikes from the Federal Reserve. The 10-year yield started 2022 at a little above 1.5%.

Bond yields and prices move in opposite directions, so the big increase is a sign that fixed-income investors are growing more nervous.

The Fed has already raised its key short-term interest rate once this year, by a quarter of a percentage point, in March. That was the first hike since late 2018 and pushed up rates from zero for the first time since the Fed slashed rates in March 2020 due to worries about the pandemic.

But the central bank is now expected to move more aggressively with rate hikes starting this week. The monetary policy-making arm of the Fed meets Tuesday and Wednesday, and traders are pricing in a nearly 100% chance of a half-point increase.

What’s more, there is now a 91% predicted chance of a three-quarter point hike at the Fed’s subsequent meeting in June, a move not seen since 1994 under Fed head Alan Greenspan. That would bring the benchmark rate to 1.5%.

Although that’s still historically low, the massive jump in such a short period of time is what’s spooking Wall Street. Some worry that the Fed’s rapid moves will eventually lead to a recession, while others fear that the central bank is still behind the curve in its inflation fight and will have to resort to even more big increases throughout the year to catch up.

Still, one expert says that the dramatic spike in yields may soon come to an end.

“Treasury yields jumped at a pace and magnitude rarely seen historically,” Saira Malik, chief investment officer of Nuveen, said in a report Monday.

“A similar rate shock looks unlikely in the near term for a number of reasons: Much of the bad news (Fed hikes, inflation) has already been priced in,” Malik said, adding that, “bonds tend to be resilient following selloffs and during Fed hiking periods.”

However, the Fed is also likely to soon start unwinding its massive bond portfolio, which could put more upward pressure on bond yields.

™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

National News

Montgomery County Sheriff's Department -- Photo of McKay Everett taken by his father Carl the day M...

Ben Kuebrich, KSL Podcasts

‘Ransom: Position of Trust’: The Phone Call

Episode one of the true-crime podcast "Ransom: Position of Trust" explores the day McKay disappeared and the beginnings of the investigation.

6 hours ago

FILE: Marijuana plants are grown at Essence Vegas' 54,000-square-foot marijuana cultivation facilit...

Carla K. Johnson, AP Medical Writer

Daily marijuana use outpaces daily drinking in the US, a new study says

Millions of people in the U.S. report using marijuana daily or nearly every day, and those people now outnumber those who say they are daily or nearly-daily drinkers of alcohol.

8 hours ago

Newly minted Michelin-starred chef Arturo Rivera Martínez prepares an order of tacos at the Tacos ...

Associated Press

The first Mexican taco stand to get a Michelin star is a tiny business where the heat makes the meat

Mexico City’s Tacos El Califa de León is the first taco cart to be awarded a Michelin star.

8 hours ago

The interior of Singapore Airline flight SG321 is pictured after an emergency landing at Bangkok's ...

Jessie Yeung, Manveena Suri and Alex Stambaugh, CNN

‘All hell broke loose’: Passengers on Singapore Airlines flight describe nightmare at 37,000 feet

Passengers on a Singapore Airlines flight hit by severe turbulence described a sudden, dramatic drop.

8 hours ago

A Delta Air Lines plane sits at the A22 gate at Salt Lake City International Airport in Salt Lake C...

Art Raymond

Flights from Utah to Mexico at risk after fed decision to nix Delta-Aeromexico partnership. State leaders push back

Long-running flights agreement facilitated tens of millions of journeys, stronger relationships between Utah and Mexico, advocates say.

11 hours ago

WASHINGTON, DC - MAY 14: U.S. Secretary of Education Miguel Cardona delivers remarks at an event ho...

Collin Binkley, AP Education Writer

Biden administration canceling student loans for another 160,000 borrowers

The Biden administration is canceling student loans for another 160,000 borrowers through a combination of existing programs.

11 hours ago

Sponsored Articles

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 Internet Safety Tips for Kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why Printer Security Should Be Top of Mind for Your Business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light Up Your Home With These Top Lighting Trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for Hassle-Free Computer Repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Close up of finger on keyboard button with number 11 logo...

PC Laptops

7 Reasons Why You Should Upgrade Your Laptop to Windows 11

Explore the benefits of upgrading to Windows 11 for a smoother, more secure, and feature-packed computing experience.

These numbers are bad news if you’re trying to buy or refinance a house