Mortgage Rates Hit 4.02%. Two-Year Yield Spikes by Most since 2009. Ten-Year Yield Goes over 2%. All Heck Breaks Loose | Wolf Street

With this 25 basis-point spike, the two-year yield reached 1.61%, the highest close since December 24, 2019. In real terms, adjusted for CPI inflation, the two-year yield is still hugely negative, at -5.89%. So despite the spike, it is still a terribly mispriced bond given the huge amount of inflation:

The average of the 30-year fixed mortgage rates quoted today spiked to 4.02% in the top tier scenario, above 4% for the first time since May 2019, according to daily data from Mortgage News Daily, with lenders quoting between 3.625% and 4.375% at the top tier.

In “real” terms, adjusted for CPI inflation, the “real” EFFR is a negative 7.4%, the most negative real EFFR in the data going back to 1954. This is the result of policy error after policy error:

Mortgage Rates Hit 4.02%. Two-Year Yield Spikes by Most since 2009. Ten-Year Yield Goes over 2%. All Heck Breaks Loose | Wolf Street