Easing tensions with Iran push mortgage rates lower — but a potential Fed rate hike clouds the outlook | CNN Business

Americans shopping for a home caught a break this week when mortgage rates edged lower. The average 30-year fixed mortgage rate fell to 6.47% this week, down from 6.52% last week, which was near the year’s high, according to data released Thursday by Freddie Mac. But the reprieve may not last. On Wednesday, the Federal Reserve, now led by President Donald Trump appointee Kevin Warsh, signaled it could consider raising interest rates later this year in response to the latest inflation spike tied to the US-Israeli war with Iran. Last week, two separate reports from the Bureau of Labor Statistics showed that annual inflation rose in May to its highest level in three years. That followed stronger-than-expected employment data. The 10-year Treasury yield, a key driver of mortgage rates, climbed higher after the reports raised concern that inflation may be more stubborn than investors had hoped for. Bond yields rise when prices fall. The US-Iran peace plan, announced on Sunday, briefly calmed those fears, sending yields lower for several days. But the relief evaporated on Wednesday amid renewed fears of a rate hike coming this year. Warsh promises a new vision for the Fed, as his colle