In the midst of everything that is going on, the bond market took a big hit to the tune of $1 trillion.  What this means is that mortgage rates tied to Treasury bonds had a massive move, the largest in many years.  The 30-year fixed rate mortgage rate jumped to nearly 4 percent, the highest rate in a year.

The trend looks to continue as the expectation of inflation is now expected to happen.  There are a variety of reasons as to why this will happen and we will go into this later in the article.

But this jump in the mortgage market happened during a time that the homeownership rate is already low because people are too broke to afford homes at inflated prices.  This is a problem because people are already walking on a financial edge.  The housing market just got more expensive for regular people.

Bond market movements

The bond market moved because the new entering administration is talking about cutting taxes but also unleashing a massive infrastructure spending plan.  Of course with nearly $20 trillion in public debt, that might cause a problem including inflation.  So the bond markets reacted in a clear direction.

Take a look at this chart:…..More Here