“Interest rates should not be set by the FED. It is not their job. Interest rates should be set by the market.”
The FED only sets one rate, the overnight banking rate.
Banks/Mortgage companies set mortgage rates based on the spread they desire above the 10yr Treasury rate. The 10yr rate is set by traders in the Bond Market. The spread used to approximately 1.5%. I’ve asked mortgage people why that spread is now closer to 3% but no one can answer.
Using the old spread, the 30yr mortgage would be around %5.4 today.
“The spread used to approximately 1.5%”
Sorry, that should have been “The spread used to be approximately 1.5%.”
“The FED only sets one rate, the overnight banking rate.”
The Feds don’t set the rate. The rate is set by the banks.