Strong Stocks, Rising Mortgage Rates Create Mixed Economic Picture

Market indexes declined immediately after the outbreak of war, but President Donald Trump has continued to highlight the stock market's resilience, noting that major indexes have repeatedly reached record highs despite geopolitical tensions, CNN reported.

Elevated bond yields have contributed to higher mortgage costs, keeping many prospective buyers out of the housing market and limiting affordability.

While many Americans remain pessimistic about the economy because of inflation and rising gasoline prices, investors have largely maintained confidence in financial markets.

Bond prices have fallen amid growing concerns that higher energy costs could fuel inflation.

As a result, the benchmark 10-year US Treasury yield climbed to its highest level in more than a year during May before easing somewhat.

The 10-year Treasury yield plays a key role in determining borrowing costs for consumers, including rates for mortgages, auto loans and certain credit products.

According to Freddie Mac, the average rate on a 30-year fixed mortgage fell to 6.47 percent last week from 6.52 percent the previous week, although it remained close to its highest level of the year.

Elevated bond yields have contributed to higher mortgage costs, keeping many prospective buyers out of the housing market and limiting affordability.

Federal Reserve Chair Kevin Warsh said following last week's policy meeting that the central bank would intensify efforts to control inflation.

Financial markets now expect the Federal Reserve could raise interest rates later this year, a move that would likely place additional upward pressure on mortgage rates and other borrowing costs.