Mortgage Rates Jump After New Treasury Buyback Announcement

What do mortgage rates have to do with Treasuries? Quite a lot, actually. U.S. Treasuries are the bills and bonds issued by the government. In addition to financing government spending, they are also the lifeblood of the financial system. Due to that central role, their liquidity, the immense size of the market, and because they're considered to be "risk free," Treasuries also serve as the baseline for most other interest rates in the U.S. This isn't to say that mortgage lenders simply look at Treasury yields plus a margin to set mortgage rates. But the trading value of Treasuries has a bearing on how mortgage-specific bonds trade. Put most simply, a mortgage bond buyer/seller compares returns between mortgage bonds and Treasuries to get an idea of the relative value of mortgage bo