China may make a ‘retaliatory’ move that experts say will ‘hit’ US homeowners ‘hard.’ Here’s what’s happening

U.S. Treasury bonds, known for their safety, are experiencing a significant sell-off due to President Donald Trump’s trade war with China. This has caused mortgage rates to rise, sparking concerns in the financial markets. The sell-off of Treasury bonds could have a negative impact on mortgages as rates tend to track the 10-year Treasury yield.

The Federal Reserve recently held interest rates steady in a “wait and see” approach, but the uncertainty in the market remains. There is also the possibility of foreign countries, particularly China, selling off U.S. mortgage-backed securities (MBS), which could further disrupt the global financial markets.

The ongoing trade war between the U.S. and China has led to increased market volatility. While Chinese officials have stated that they have no plans to drastically change their foreign reserves, the potential impact of a sell-off of U.S. Treasuries and MBS remains a concern.

Despite the risks, some experts believe that a significant sell-off is unlikely. Melissa Cohn of William Raveis Mortgage points out that such a move could harm China’s financial interests and destabilize global currency markets. However, with the escalating trade tensions, a sell-off cannot be ruled out entirely.

For investors looking to protect their savings in the face of potential market turmoil, gold may be a safe-haven investment option. J.P. Morgan is forecasting that gold prices could continue to rise, making it an attractive investment for those seeking diversification.

In the real estate market, a sell-off of MBS could lead to higher mortgage rates, making it more challenging for homebuyers. Refinancing may become less attractive, and some buyers could be priced out of the market. Sellers may need to adjust their prices or offer incentives to attract buyers.

In uncertain times, securing the lowest mortgage rate is crucial for both buyers and sellers. Whether refinancing or purchasing a new home, locking in a good rate can lead to substantial long-term savings. It’s essential to stay informed about market trends and make strategic decisions to navigate through economic uncertainties.

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