Bond Market Sell-Off Drives Mortgage Rates to Two-Decade High

The Federal Reserve's decision to hold interest rates steady was met with a bond market sell-off that saw yields surge to their highest levels in nearly two decades.

The yield on the 30-year US Treasury bond reached 5.31 percent, while the 10-year yield, a benchmark for fixed borrowing, climbed above 4.7 percent.

This led to a significant increase in mortgage rates, with the average 30-year fixed mortgage rate now at 6.75 percent on a $340,000 loan.

The added monthly payment would be approximately $140 and more than $50,000 over the life of the debt.

Two key factors drove the sell-off: Brent crude prices surged toward $90 a barrel following stalled US-Iran peace talks, reviving inflation fears, and concerns about the growing national debt.