Deficit Surge Keeps Mortgage Rates at 6.48%, Not the Fed

Mortgage rates near 6.48% are driven more by a surge in federal borrowing (a $3.4 trillion deficit through 2034) and rising Treasury yields than by the Fed’s policy. Long-term rates follow 10-year yields and are shaped by inflation expectations and prepayment risk in mortgage-backed securities, so rates can stay elevated even as the Fed cuts rates. Historically, 6–8% has been common outside the low-rate era, so today’s level reflects broader market forces rather than the Fed alone.