US Yield Surge Triggers Mortgage Hedging
Rising long-term US Treasury yields have sparked mortgage-related hedging, adding selling pressure to the bond market. Analysts note the impact remains smaller than past selloffs as more mortgages sit out of the money.
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A surge in long-term United States Treasury yields has triggered widespread mortgage hedging, adding selling pressure to the bond market. Benchmark 10-year yields rose 130 bps and 30-year yields climbed 100 bps since late February. The shift pushed 30-year mortgage rates to 7.4%, a nearly three-year high.
