People are fascinated by the stock market, which is definitely more dramatic. But the bond market has more of an influence on your daily life, especially if you’re renewing a mortgage or plan to buy a home. If you want clues as to where mortgage rates are going, check what’s happening with bonds.
The reason for this uncertainty about rates is that inflation, particularly in the United States, has yet to back down to the level preferred by central bankers. The stickiness of inflation raises the question of whether the cost of living in the mid-2020s is going to rise more than in the pre-pandemic period. Inflation then was locked in around 2 per cent. Looking ahead, a 2 to 3 per cent range seems quite possible.