The Commercial Real Estate Alpha Site

Mortgage rates surged past 7% last week, but this time the driver wasn’t inflation data or a surprise Fed move—it was the bond market unraveling in the wake of President Donald Trump’s chaotic tariff push. His latest escalation in the U.S.–China trade war sparked one of the most dramatic selloffs in Treasuries in decades, with 10-year yields spiking 50 basis points to 4.49%—the sharpest weekly rise since the aftermath of 9/11. The scale of the move shocked Wall Street, as investors pulled back from what were once considered the world’s safest assets, rattled by both economic uncertainty and fears about U.S. policy direction. Even a cooler-than-expected inflation report couldn’t stop the bleeding.

This volatility is now hitting Main Street in a big way. Since mortgage rates closely track the 10-year Treasury yield, the surge in yields has made home loans significantly more expensive—virtually overnight. For buyers already grappling with high prices and limited inventory, this spike further erodes affordability and puts homeownership even further out of reach. And the impact goes beyond housing. Higher yields ripple through the economy, raising borrowing costs for consumers, small businesses, and corporations alike. Trade policy isn’t just a geopolitical lever—it’s affecting everyday financial decisions. By shaking confidence in U.S. debt, this bond market upheaval is tightening financial conditions and threatening to stall momentum.