• Why they matter: They issue massive amounts of government debt to fund spending.
• Impact: More debt = more Treasury bonds = higher yields = higher mortgage rates. 🚨 Today, the Treasury is auctioning T-bonds, and that’s also creating havoc and chaos in the bond markets.
• When the Treasury floods the market with bonds, investors demand higher returns. Mortgage rates typically follow the 10-year Treasury yield, so they also rise or fall in tandem.

2  Congress & Fiscal Policy

• Why they matter: They approve budgets, stimulus, and deficit spending.
• Impact: Large deficits force the Treasury to borrow more, driving up the 10-year Treasury Yield.
• Translation: If Congress keeps spending without offsetting revenue, it fuels the debt spiral and pushes mortgage rates higher.

3  Bond Market & Investor Sentiment

• Why they matter: Mortgage rates closely track long-term bond yields, particularly the 10-year Treasury yield.
• Impact: If investors fear inflation, recession, or political instability, they demand higher yields.
• Translation: Mortgage rates spike when bond buyers get nervous or expect more Treasury issuance.

4  Mortgage Lenders & GSEs (Fannie/Freddie)

• Why they matter: They price loans based on risk, demand, and bond spreads.
• Impact: If spreads widen (e.g., between mortgage-backed securities and Treasurys), rates go up.
• Translation: Even if Treasury yields are stable, lenders can raise rates to protect margins or offset risk.