10/17/2026
Economic Outlook – Despite higher-than-expected inflation, Treasury bond yields fell sharply this week as investors shifted their focus from inflation concerns to growing uncertainty about the economy and the stock market. The 10-year Treasury yield, which had climbed above 5.3% last week, dropped to approximately 5.1%, its largest weekly decline since February. Much of the decline was driven by a selloff in technology and artificial intelligence-related stocks, as investors questioned whether the enormous investments being made in AI infrastructure would generate sufficient returns, particularly with borrowing costs remaining elevated. Investors moved money out of stocks and into the relative safety of U.S. Treasury bonds, pushing bond prices higher and yields lower. Comments from Federal Reserve officials suggesting that additional interest rate increases may not be necessary immediately also helped bring yields down. For the housing market, declining Treasury yields are encouraging because mortgage rates generally follow the direction of the 10-year Treasury. If yields continue to decline, lower mortgage rates could help improve affordability, bring more buyers into the market, and strengthen home sales in the months ahead.
Economic Outlook – Despite higher-than-expected inflation, Treasury bond yields fell sharply this week as investors shifted their focus from inflation concerns to growing uncertainty about the economy and the stock market. The 10-year Treasury yield, which had climbed above 5.3% last week, dropped...
