Elevated inflation around 3.4% year-over-year, combined with expectations for additional Federal Reserve rate hikes in December 2026 and early 2027, has pushed 10-year Treasury yields above 5.2% and driven 30-year mortgage rates to recent levels near 7.4%, with weekly averages hitting multi-year highs. Mortgage Bankers Association forecasts place the average at 7.3% for Q4 2026 and above 7% through 2027, reflecting sustained demand for longer-term borrowing from deficits and AI-related capital spending. These dynamics create upward pressure on fixed mortgage pricing, where the 30-year rate tracks Treasury benchmarks plus lender spreads that have widened amid volatility. Key near-term catalysts include upcoming CPI, PPI, and FOMC communications that could shift market-implied odds on rate paths and yield levels.