Fed Hawks Take Aim at Mortgage Rates

Fed officials are taking a hawkish stance on monetary policy, sending mortgage rates higher. The 10-year yield hit a yearly high of 4.74% and mortgage rates rose six basis points to 6.83%. Three Federal Reserve presidents - Beth Hammack, Neil Kashkari, and Lorie Logan - spoke out in favor of tighter policy, with some calling for multiple rate hikes.

Hammack, president of the Cleveland Fed, wants to undo last year's rate cuts, which she never supported. She believes that with a stable labor market and unemployment near maximum employment, high inflation is the bigger concern. Hammack would like to take back all three rate cuts from last year.

Kashkari, president of the Minneapolis Fed, also wants a more gradual approach to rate hikes. He has already penciled in one rate hike for 2026 and believes that tightening policy incrementally is better than waiting for inflation to become entrenched.

Logan, president of the Dallas Fed, has long been a hawk on monetary policy. She thinks that current policy isn't restrictive enough to get back to the 2% inflation target. With inflation still elevated, Logan believes that more action is needed to control prices and ease the strain on American families and businesses.