Macro

President Trump announced a 10% baseline tariff on all U.S. imports and higher 'reciprocal' tariffs on countries including China (34%), the EU (20%), and Japan (24%), escalating global trade tensions. The move, set to take effect in early April, risks triggering retaliatory measures and a trade war, with economists warning of higher consumer prices, reduced manufacturing competitiveness, and potential market instability.

As of August 13, 2026, the average 30-year fixed mortgage rate has eased slightly to 6.67%, down two basis points from the prior week but still near a one-year high, with the 15-year fixed rate at 5.96%. The 10-year Treasury yield, which mortgage rates closely track, closed at 4.68% on August 12, and the spread between the two remains near two percentage points at 1.99 points. The Federal Reserve, now chaired by Kevin Warsh, has held rates steady in 2026 after three cuts in 2025, and traders do not expect a quarter-point hike until December at the earliest. Fannie Mae continues to forecast rates in the 6.2% to 6.3% range through 2027. The National Association of Realtors reports year-to-date home sales are up 2.4% despite the elevated rate environment, though affordability remains strained by high borrowing costs and a median single-family home price of $410,700 as of Q2 2026. Experts advise buyers not to wait for rates to drop, noting that a recession could actually increase demand for limited supply if rates fall. Strategies for buyers include considering fixer-uppers, condos, 15-year mortgages, rate buydowns, and exploring less-expensive neighborhoods or longer commutes.

As of mid-July 2026, mortgage rates have stalled near 6.5%, with Freddie Mac reporting the average 30-year fixed rate at 6.55%—six basis points higher than the previous week. The Federal Reserve, now under Chairman Kevin Warsh, has held rates steady in 2026 after three cuts in 2025, and traders see increasing odds of a rate hike as early as September. Mortgage rates are more closely tied to the 10-year Treasury yield, which closed at 4.55% on July 15. The spread between that yield and the 30-year mortgage rate has narrowed slightly to 2.00 percentage points from 2.28 a year ago, explaining why rates are only modestly lower. With home prices remaining high—the median single-family home sale price reached $405,300 by Q4 2025—and supply constrained, experts advise buyers not to wait for rates to drop below 6% but instead to consider strategies like fixer-uppers, condos, or longer commutes to find affordable options.

Mortgage rates remain elevated, pressuring the 2026 housing market as year-over-year purchase volume drops 3.4%, per Keefe, Bruyette & Woods. As of August 20, the average 30-year fixed-rate mortgage stands at 6.65%, slightly below last week but above 6.58% a year ago. The 10-year Treasury yield, which mortgage rates track, closed at 4.65% on August 19, up from 4.33% last year. KBW managing director Bose George expects continued weakness in mortgage applications due to rising rates and seasonal slowdown. Fannie Mae forecasts rates near 6.8% through 2027. The Federal Reserve, now chaired by Kevin Warsh, has held rates steady in 2026 after three cuts in 2025, with no hike expected until December. The median single-family home price reached $410,700 by Q2 2026, up from $208,400 in Q1 2009, as supply constraints keep prices high.

As of August 27, 2026, the average 30-year fixed mortgage rate stands at 6.66%, holding above 6.5% for four months, with the 15-year rate at 5.98%. Analysts suggest rates could rise further due to persistent inflation, a growing federal deficit, and steady employment, with the Federal Reserve expected to hold or hike rates. The 10-year Treasury yield, which influences mortgage rates, has climbed to 4.66%. Despite high rates, home prices remain elevated, with the median single-family home price reaching $410,700 in Q2 2026, driven by supply-demand imbalance. Experts advise buyers to consider strategies like fixer-uppers, condos, or longer commutes rather than waiting for rates to drop.

The U.S. and China agreed to reduce reciprocal tariffs from 125% to 10% for 90 days, maintaining limited duties on fentanyl-related goods, following high-level talks in Switzerland. The de-escalation boosted global markets, with surges in U.S. futures, European indices, and oil prices, signaling relief over eased trade tensions. However, analysts caution the truce may not lead to a lasting resolution, as structural issues and remaining tariffs persist.

A Republican-backed spending bill passed by the Senate would eliminate the $7,500 federal tax credit for new EVs after September 30, impacting consumer incentives and automakers' sales strategies. The move, part of a broader tax package, could slow EV adoption and disproportionately affect middle- and lower-income buyers, with market implications for EV affordability and climate goals.

Mortgage rates are expected to remain near 6% through 2030, with no return to the 3% lows seen during the pandemic, according to a consensus analysis combining Deloitte, CBO, and Goldman Sachs projections with AI-modeled spread estimates. As of March 5, the 10-year Treasury yield was 4.09% and the 30-year fixed rate was 6.00%, reflecting a spread of 1.91 percentage points. The base-case forecast uses a 10-year Treasury yield settling at 3.9% by mid-2027 through 2030 (Deloitte), with the CBO projecting 4.1–4.3% and Goldman Sachs 4.5% by 2035, plus a spread of roughly 2 percentage points to 30-year fixed mortgage rates. A bull case sees rates near 5% by 2030 if inflation eases and the spread normalizes toward its long-run average of 170 basis points; a bear case sees rates climbing to 7% by 2027 before easing to 6.6% by 2030 if inflation persists above 2.5% and fiscal deficits widen. The analysis emphasizes that only a severe recession or other major disruption—such as war, financial collapse, or another pandemic—could push rates significantly lower, and no forecast predicts a return to 3% mortgage rates in the next five years.

JPMorgan CEO Jamie Dimon highlighted recent auto sector bankruptcies, including Tricolor Holdings and First Brands, as early warnings of loose corporate lending standards post-2010. JPMorgan took $170 million in charge-offs from its Tricolor exposure, while other banks like Fifth Third and Jefferies face hundreds of millions in losses, sparking broader concerns about hidden credit risks in leveraged lending markets.