Blend Financial sees borrowing costs staying elevated into 2027 as inflation persists
TLT•Blend Financial expects US borrowing costs to remain elevated into 2027 as persistent inflation limits prospects for rate relief. October consumer prices rose 0.4%, while the 10-year Treasury yield climbed from about 4.86% to 5.15% in one week.
1. Rates and inflation
Blend Financial said US borrowing costs are likely to remain elevated into 2027 as persistent inflation reduces prospects for interest-rate relief. Markets have effectively priced in a December Federal Reserve rate hike, favoring a quarter-point increase over a half-point move.
2. Price and yield figures
October consumer prices rose 0.4%, and core inflation ran at a 3.7% annualized pace over three months, above the Fed's 2% target. The 10-year Treasury yield rose from approximately 4.86% to 5.15% in one week.
3. Borrowing cost pressures
Competition for capital from government borrowing and AI infrastructure financing could keep mortgage rates elevated even as inflation cools.
