Market News Today October 7 - Fed Signals Another Rate Hike, 10-Year Yield Hits 2002 High, Stocks Slip From Records

If you are waiting for mortgage rates to come down, the Federal Reserve just made that wait look longer.

Minutes from its September meeting show most officials expect another hike before year end, the 10-year Treasury yield touched its highest level since 2002, and stocks slipped from record highs.

Here's the market news worth knowing today.

Is the Fed Raising Interest Rates Again?

The Fed has made its next move clear, even if it has not named the date.

Minutes released Wednesday show most officials expect another rate hike before the year is out, after September's increase lifted the Fed's benchmark rate to 3.75% to 4%.

Officials said inflation has made little progress toward their 2% target, and several noted that rising stock prices are still giving the economy a lift.

Traders see only about a one-in-six chance of a hike on October 28, but if one comes by December, credit card and home equity rates usually rise with it.

Savers, at least, keep earning more on their cash.

Why Did the 10-Year Treasury Yield Hit a 2002 High?

The rate that matters most to homebuyers climbed somewhere it has not been in 24 years.

The 10-year Treasury yield rose as high as 5.36%, its highest since April 2002, before easing when a $39 billion sale of new government debt drew solid demand.

Lenders price mortgages and car loans off this yield, so each step higher makes new borrowing more expensive, whatever the Fed does next.

Today's strong auction offered some relief, but this year the trend has pointed one way.

Why Are Stocks Slipping From Record Highs?

Wall Street's record run met the bond market today, and the bond market won.

The S&P 500 and Nasdaq slipped from Tuesday's records, the Dow fell around 300 points and smaller companies dropped more than 1%, as higher yields made stocks look more expensive.

The pressure is heaviest outside the handful of giant tech companies driving the rally, so the record looks sturdier than the market underneath it.

With earnings season about to begin, companies will need strong numbers to justify these prices.

Rates Just Hit a 24-Year High. The Smart Money Is Not Waiting.

The Fed is signalling more hikes and borrowing costs just touched their highest level since 2002, and moments like this are often when the next big winners quietly take shape. By the time it feels obvious, the early money has usually already moved.

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