Two numbers that cannot both be true
Everyone knows the Federal Reserve sets interest rates. It's the one piece of economics that makes the evening news. Rates too high? The Fed cuts. Borrowing gets cheaper. Simple.
Except look at what actually happened over the past two years.
The Fed pushed its rate down 1.7 percentage points — 170 A basis point is one hundredth of a percentage point. Rates move in amounts too small for whole percentages to describe, so the market counts in these instead: 100 bp = 1%. It's the unit on the tape at the top of this page., in the market's own shorthand. The 30-year Treasury went up. These two lines are supposed to move together. Watch them come apart:
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In early 2024 the Fed's rate sat above the 30-year — an inverted curve, the classic recession warning. Today it sits far below it. The Fed let go of the rope and the long end floated up on its own.
If the Fed controls interest rates, why did the loan you actually care about get more expensive?
The answer is that the Fed doesn't control interest rates. It controls one rate — the overnight one, what banks charge each other to borrow until tomorrow morning — and hopes the rest follow. Right now they aren't following.
Everything else is set somewhere the Fed doesn't sit: an auction room, and the enormous market that trades around it. To understand what's happening to your mortgage you have to go into that room. It takes about fifteen minutes. Meet Peter.
Anatomy of a thirty-year promise
Peter has $1,000 and doesn't want to gamble it. So he lends it to the United States government.
In exchange he gets a contract with three numbers on it, and that contract is the bond:
$1,000
What the government owes him back at the end. Also called par. Printed on the contract; never changes.
4% — $40 a year
The annual interest, calculated on the face value, every year, no matter what happens to anything else. Fixed at birth.
30 years
When he gets the $1,000 back. Until then he collects $40 a year — $1,200 in total.
That's the whole product. A bond is a loan you can resell.
Two markets, not one
There are two different places a bond can change hands, and the difference between them is where all the drama lives.
The primary market
Where Peter got his bondThe government auction. New bonds, straight from the Treasury, sold roughly weekly. This is the government actually borrowing money.
Peter paid $1,000 and received a brand-new contract paying 4%. Because he paid exactly face value, his coupon rate and his return are the same number: 4%.
The secondary market
Everyone elseInvestors trading bonds that already exist. Peter isn't obliged to hold for 30 years — he can sell to another investor tomorrow.
Around $32 trillion of US government debt sits out here, changing hands continuously. The government gets none of this money; it already got its $1,000.
Peter bought a $1,000 bond with a 4% coupon, so he is owed $40 a year, frozen, for thirty years. That obligation is written into the contract and cannot change. But the price another investor will pay him for that contract moves every second of every day. Everything that follows falls out of that single asymmetry: the payment is fixed, the price is not.
So where does the 4% come from in the first place? Nobody at the Treasury picks it. It comes out of the auction — and the auction is the part almost nobody explains.
The room where your mortgage is decided
Roughly every month the Treasury announces it needs to sell, say, $25 billion of 30-year bonds. It does not announce an interest rate. It announces a quantity, and then it holds an auction and lets buyers tell it the price.
Who is actually in the room
These are the buyers everyone means when they say "the bond market":
Primary dealers
About 25 giant banks and broker-dealers. They have a standing obligation to bid at every single auction — the backstop that guarantees the government can always sell. They mostly resell within days.
Indirect bidders
Foreign central banks, sovereign wealth funds and overseas institutions, bidding through the dealers. Japan alone holds about $1.2 trillion of US government debt.
Direct bidders
Large domestic institutions bidding for themselves: pension funds, insurers, mutual funds, hedge funds.
Non-competitive
People like Peter, buying small amounts through TreasuryDirect. They don't name a price — they accept whatever the auction decides. Capped at $10m each; a rounding error.
How the bidding works
Everybody in groups 1–3 submits a sealed bid saying, in effect: "I will lend you $2 billion, but only if you pay me at least 5.10%." A bidder who demands a lower yield is offering the government a better deal.
The Treasury then does something that surprises most people the first time they see it:
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Sort every bid from the cheapest yield upward
The most generous lenders — the ones willing to accept the least interest — go to the front of the queue.
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Fill the queue until the $25 billion is sold
Work down the list, accepting bids, until the entire amount is placed. Everyone past that point gets nothing.
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Charge everyone the worst accepted yield
The yield of the last bid needed to finish the sale becomes the rate paid to all winners — even the bidder who said they'd accept 4.88%. This is a single-price, or Dutch, auction, and it's the whole ball game.
Because everyone pays the worst accepted price, the government's borrowing cost is decided entirely by how far down the queue it has to go. Sell a little, and you only need the eager lenders at the front. Sell a lot, and you keep going until you reach people who will only lend at much higher rates — and then pay that rate to everybody. This is the mechanical link between how much the government borrows and what it costs. Not a theory — an arithmetic consequence of the auction rules.
View the bid book as a table
The two numbers traders stare at
When an auction finishes, the result is published within minutes and two numbers decide whether the market treats it as good news or bad.
Bid-to-cover is total bids divided by the amount offered. August's auction drew about $60 billion of bids for $25 billion of bonds — a ratio of 2.39. Above roughly 2.5 is healthy appetite; below 2.0 is a warning. It answers: how many people wanted in?
The tail is subtler and matters more. Before the auction, traders already buy and sell the not-yet-issued bond in a grey market called when-issued trading, which gives everyone a live guess at where the auction should clear. If the auction actually clears at a higher yield than that guess, the auction "tailed" — the government had to pay more than the market expected to get its money away.
August's auction tailed, and primary dealers were left holding 11.5% of the issue. Dealers absorbing an unusually large share is the tell: the real end-buyers didn't show up in the size expected, and the obligated backstop had to eat the difference.
How the auction becomes everyone's price
Here's the link that ties the two markets together, and it's the piece most explanations skip.
The moment that auction clears at 5.22%, a brand-new, government-guaranteed, 30-year bond paying 5.22% exists and is available. That is now the benchmark. Every other 30-year claim on the US government in the world — including Peter's — must instantly reprice to compete with it, because no rational buyer pays more for an inferior version of the same thing.
The causality runs in a loop, continuously:
A rising yield does not mean more people want the bond. It means the opposite. Yields rise when demand is weak — when the government has to reach further down the queue, offering more interest, to find enough lenders. Strong demand pushes yields down. Whenever you read "yields surged," read it as "buyers had to be bribed harder."
Why every holder just lost money without selling anything
Three years pass. Peter still holds his $1,000 bond paying him $40 a year. Then a Treasury auction clears at 5%, and Peter's world quietly changes.
A fresh $1,000 bond now pays $50 a year. Peter's pays $40. Suppose he needs his money early and takes his contract to the secondary market to sell it.
Why would anyone pay Peter $1,000 for $40 a year, when the Treasury will sell them $50 a year for the same $1,000?
They wouldn't. Peter has exactly one lever: cut the price. He has to discount his bond until the fixed $40 a year, measured against the smaller amount the buyer actually pays, works out to the same 5% return available everywhere else. That price is about $846. There, the buyer is indifferent, and only there.
Peter's income never changed — still $40 a year, exactly as the contract says. The price fell so that the yield could rise to meet the market. They are two ends of one seesaw. "Bond prices are falling" and "bond yields are rising" are the same event, described from opposite ends.
So when you read that yields hit a 19-year high, you are also reading — in the same breath — that everyone already holding those bonds just took a serious loss.
So does Peter actually sell?
This is the question the charts never answer, and it's the one that decides whether any of this hurts him. He has two choices, and they are genuinely different.
If he holds to maturity
He loses nothing in cashThe contract still pays $40 a year, and in year 30 the Treasury still hands back the full $1,000. The $846 was never a real loss — it was a quote. Nobody can force him to accept it.
What he does lose is invisible: he's locked into 4% while the world now pays 5%. That's roughly $10 a year of forgone income, every year, until 2056. Not a loss on a statement — a loss of the better life he could have had with that money.
If he sells today
He realises the $154He takes $846 and the loss becomes real, printed, permanent. But here's what almost nobody points out: he can immediately put that $846 into new bonds paying 5%.
$846 at 5% earns him $42 a year — more than the $40 he was getting. He has less capital and more income, and the two exactly offset. That is what "fairly priced" means.
Both paths leave Peter in the same place. The market moved him from one to the other without making him better or worse off, which is precisely why the price is $846 and not some other number. The $154 isn't money being taken from him — it's the market's measurement of how much worse a 4% promise is than a 5% one, over thirty years. The loss is real, but it was caused by rates rising, not by selling. Selling only decides when he acknowledges it.
Which makes the dangerous case obvious: it's the holder who must sell. Someone who planned to hold to maturity but needs cash early — a saver, a fund facing withdrawals, or a bank whose depositors all want their money at once — is forced to accept the $846. For them the paper loss becomes a real one at the worst possible moment. Remember that; it kills a bank in Act 5.
Why the thirty is the dangerous number, not the four
Peter lost 15% of his bond's value from a one-point move in rates. That feels too big, and it's worth understanding where it comes from, because it explains why the headline is about the 30-year specifically and not about bonds in general.
The size of the loss has almost nothing to do with the 4% coupon. It comes from the 30. Peter's problem isn't that he's earning $10 a year too little — it's that he's earning $10 a year too little thirty times over. The buyer discounts every one of those thirty shortfalls, and the price has to fall far enough to compensate for all of them at once.
Shorten the maturity and the same rate move barely registers, because there are only a handful of shortfalls left to compensate for:
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A 2-year bond shrugs the move off — it loses under 2%, because it only has two years of being slightly wrong before it repays. The 30-year loses more than eight times as much.
That asymmetry is why the 30-year is the number that makes headlines. It's the most sensitive instrument in the market: the place where a small change in what the world believes about the next three decades produces the largest, most visible change in price. It is the bond market's amplifier.
This is why "bonds are the safe asset" broke. In 2022 long-dated Treasuries had their worst year in modern history — not because America came close to defaulting, but because rates rose fast and duration did the rest. Safe from default is not the same as safe from price. Every one of those bonds will still pay back Par is the face value printed on the bond — the amount the government repays at maturity, regardless of what the bond traded for in between. Peter's was $1,000.. Anyone who had to sell first did not get to find out.
Why the long end broke loose
We now have the machinery. Yields rise when the Treasury has to reach further down the bid queue. So the real question is: why is the queue getting harder to fill? Three forces, and none of them is the Fed.
Force 1 — There is simply too much of it
The US government now owes just over $40 trillion, a line it crossed this month. To keep running it has to sell more than $2 trillion of new bonds a year, on top of refinancing everything that matures.
Go back to the auction. Selling $25 billion means stopping partway down the queue. Selling $45 billion means pushing past the eager lenders into people who'll only lend at 5.36% — and then paying that to everyone. Rising supply mechanically walks the government into worse and worse bids. That's not sentiment. That's the auction rules.
Force 2 — Thirty years is a long time to trust a currency
Inflation is running at 3.4%, still meaningfully above the Fed's 2% target. If you lend at 5% for thirty years and inflation averages 4%, you earned 1% a year for three decades of risk.
Inflation is the bond investor's only true enemy. A share in a company can raise its prices; a bond's $40 coupon cannot. It is a fixed number being slowly eaten. Lenders know this, so when inflation looks sticky they refuse to bid at low yields — which, in the auction, is exactly the behaviour that pushes the clearing rate up.
Force 3 — The term premium came back
Here is the direct answer to the question from Act 0. A 30-year yield is really two things added together:
- What the market expects short-term rates to average over the next 30 years. The Fed heavily influences this part.
- The term premium — extra compensation for locking money away for three decades when the future is uncertain. The Fed does not control this part.
For fifteen years the term premium was crushed near zero: quantitative easing had the Fed buying bonds at any price, foreign central banks were hoovering up Treasuries, and the world was convinced inflation was dead forever. All three have reversed. The term premium is back, and it is doing work the Fed cannot undo by cutting.
If 5.27% is so attractive, why isn't everyone buying?
This is the obvious objection, and it's the right one. A guaranteed 5.27% from the United States government is the best risk-free deal in twenty years. If it's really that good, buyers should pile in — and buying pushes prices up, which pushes yields back down. The problem should fix itself.
It hasn't. There are five reasons, and together they're the honest answer.
Supply outruns them
Buyers are showing up — August's auction still drew $60 billion of bids. But the Treasury keeps arriving with more paper, week after week. Demand isn't absent; it's being outpaced. You can be thirsty and still drown.
Waiting is the better trade
If you think the 30-year is heading to 5.6%, buying today at 5.27% is a mistake — duration maths says you'd lose about 5% of your capital on the way. So buyers stand back. That hesitation is itself a withdrawal of demand, which pushes yields higher, which confirms the thesis.
The income can vanish
5.27% a year sounds generous until you remember a further half-point rise costs about 8% of capital. That's eighteen months of income wiped out in a few weeks. For anyone who might need to sell, the yield isn't compensation enough.
A serious new competitor
The AI buildout turned big tech into enormous borrowers. Hyperscalers and related firms issued about $225 billion of bonds in the first half of 2026 — a tenfold jump — on pace for $400 billion. Same pool of savings, and they pay more than the government.
Yields don't fall just because bonds look cheap. They fall when demand finally exceeds supply at the going price — and that requires either the government to borrow less, or buyers to become convinced that inflation is beaten and rates have peaked. Until one of those happens, "it's attractive" and "it keeps getting cheaper" can both be true at the same time. Markets can stay mispriced for exactly as long as the supply keeps coming.
Who is actually holding all of this
It's worth knowing who is on the other side, because "the bond market" sounds abstract until you see that it's pension funds, foreign governments and the Fed itself.
View as table
How it reaches your bank account
You will probably never buy a 30-year Treasury. It reaches you anyway, because it is the reference price for long-term money everywhere in the economy. Nobody lends to you for less than the government pays. The government's rate is the floor; everything else is that floor plus a markup for the risk that you, unlike the Treasury, might not pay it back.
Two different forces set the interest rates in your life. The first is the Federal Reserve — the Fed, America's central bank. It controls a single rate: what banks charge each other to borrow overnight. Over the past two years it cut that rate by 1.7 percentage points, the cut this page opened with. The second is the bond market — the auction room from Act 2 — where the price of borrowing for years at a time is set.
Did anything get cheaper when the Fed cut?
Yes — but only some things, and which ones comes down to a single question: how long is the money borrowed or saved for? Anything whose rate resets every month or so follows the Fed's overnight rate down. Anything fixed for years is priced by the bond market instead, and the bond market went the other way.
Short-term money
Rates that reset every month or so
- Credit cardsA variable rate that resets within a month or two of each cut
- Home-equity linesAlso variable, tied to the Fed's rate
- Savings accountsBanks and money-market funds pass the cuts on to savers
These followed the Fed down. Cheaper to borrow — and savers earn less.
Long-term money
Rates fixed for years, on the day you borrow
- 30-year mortgagesPriced off the 10-year Treasury, not the Fed
- Federal student loansSet by law each May, from a 10-year Treasury auction
- Companies borrowing for yearsPriced off Treasuries of the same length
These didn't follow the cut, because the bond market went the other way.
That is the page's opening contradiction, showing up in your own bills. The Fed's cuts did reach you — on the card in your wallet, and in the smaller interest on your savings. They never reached the loan on your house, because that rate was never the Fed's to set.
Your mortgage is a Treasury bond wearing a hat
A 30-year mortgage is long-term lending — the same product the Treasury sells. So lenders start from the Treasury yield and add roughly 1.9 points for the risk that you default or refinance early. (They use the 10-year, not the 30-year, because most mortgages are repaid or refinanced within about a decade.)
Nothing about you changed. Your salary, your credit score, the house — all identical. The bond market repriced, and $106,813 moved from your pocket to your lender's over the life of the loan.
It doesn't stop at housing. Federal student loans, business loans and commercial property all price off the same long end of the curve, each with its own markup on top. The exceptions sit on the Fed's side of the card above — which is why a credit card got slightly cheaper over the past two years while a mortgage quote didn't.
What your savings really earn
Two numbers decide what your savings are worth. One is the interest you're paid. The other is inflation — how fast prices are rising — because every rise shrinks what your money can buy. What you really earn is the gap between the two.
Take $100,000 in safe 1-year Treasuries. Today that earns 4.03%, or $4,030 a year. But with prices rising 3.4%, the same money buys about $3,400 less than it did, so what you really gain is the difference: about $630. Now rewind to 2021. The same $100,000 earned just $70, while prices rose 4.7% — so it was really losing $4,630 of buying power a year.
You'll often hear that savers now earn 58 times what they did in 2021. In pure interest, that's true — but it ignores inflation, and it overstates the change badly. In 2021 savers were losing buying power every year; today they're finally ahead, if only by a little. The truthful summary isn't "savers got richer." It's savers stopped bleeding. After fifteen years of being quietly taxed to subsidise borrowers, cash roughly breaks even again.
That's a smaller claim than the headline number, but it's a real one, and for some people it matters enormously. A pension fund that must fund a payment in 2050 can now lock in over 5% a year, guaranteed, for doing nothing risky at all. In 2021 that was mathematically impossible — such funds were forced into stocks and property to have any hope of meeting their obligations.
There are two catches. A savings account is short-term money, on the Fed's side of the card above, so each Fed cut trims what cash earns. And higher rates only help money going in now: anyone who already owned long-dated bonds watched their price fall, exactly as Peter's did in Act 3.
And it reaches savers who never buy a bond at all, because banks park deposits in Treasuries. When yields spiked in 2022, those holdings lost value exactly as Peter's did. Normally that's a paper loss — hold to maturity and you get par. But Silicon Valley Bank's depositors all asked for their money at once, which forced it to sell into the loss, and the bank failed. It's the forced-seller case from Act 3, at institutional scale.
Why a share price falls when a bond yield rises
A share is a claim on a company's future profits. To see why rising Treasury yields drag its price down, you need one idea from finance: the discount rate. It sounds technical, but it's something you already know.
What is $100 next year worth today?
Would you rather have $100 today or $100 a year from now? Today — because you could put today's $100 somewhere safe, like a Treasury, and have more than $100 by next year.
So turn the question around: how much would you need to put away today to end up with exactly $100 in a year? If a Treasury pays 4%, the answer is $96.15, because $96.15 plus 4% interest comes to $100. That $96.15 is what the future $100 is worth to you today. Working backwards like this is called discounting, and the safe rate you use to do it is the discount rate.
Where the two rates come from
The starting point for any discount rate is what a safe Treasury pays, and that moves. You saw it move at the top of this act: in August 2024, just before the Fed started cutting, a 30-year Treasury paid about 4%. Today it pays 5.27%. So the rest of this section values the same future money twice — at the safe rate back then, and at the safe rate now.
Now do the same for a share
Suppose you think a share will be worth $1,000 in five years' time. What is the most it's worth paying for it today? Compare it with the safe alternative: how much would you have to put in a Treasury today to end up with that same $1,000 in five years?
Back in 2024 there was no reason to pay more than about $822 for that share, because $822 in a Treasury got you to the same $1,000 with no risk at all. Today the safe route costs only $774, so the share is worth about 6% less to you — even though nothing about the company has changed. Every buyer does the same sum, so the share price itself falls. That is why stock prices drop when bond yields rise. It's the same maths that took Peter's bond from $1,000 to $846 in Act 3.
The further away the profits, the bigger the drop
Five years took about 6% off. Profits that arrive later are hit harder, because the higher rate compounds for every extra year of waiting. Drag the slider to see what $100 arriving in the future is worth today, at 2024's 4% and at today's 5.27%.
Slide it to 3 years and the value barely moves. Slide it to 25 and over a quarter of it is gone, with nothing having changed about the company at all.
That's the whole story of which stocks get hurt. A utility or a bank earning steady cash today barely flinches. A tech company priced on profits in 2035 gets hit hard, because its value is almost entirely made of distant promises — it has, in exactly the sense from Act 3, high Duration is how much a price moves when rates move. The longer you wait to be paid, the more a change in rates costs you — which is why a 30-year bond lost 15% where a 2-year lost under 2%.. A growth stock is a long-dated bond that happens to be traded on an equity exchange.
For fifteen years the argument for owning stocks was There Is No Alternative — bonds paid nothing, so where else would you go? At 5.27% risk-free for thirty years, there is now a very obvious alternative. Every pension fund and allocator on earth is rerunning that comparison, and some are choosing the bond. A fund that needs 5% a year to meet its obligations used to have to own equities to get there. Now it doesn't.
The hurdle rate went up
Companies fund expansion by borrowing, and corporate borrowing is priced off the Treasury curve plus a credit spread. When the base rate rises, every project has to clear a higher bar to be worth doing at all.
A factory expansion returning 7% was clearly worth building when money cost 4%. At 6.5% it isn't — you'd be taking real risk for half a point. It doesn't get cancelled dramatically; it just quietly never starts. Multiply that across an economy and you get fewer new plants, fewer expansions, slower hiring.
This is the intended mechanism, incidentally. It's how higher rates are supposed to cool an overheating economy — the discomfort is the policy working. What's unusual now is that it's happening through the long end, which the Fed didn't choose and can't easily reverse.
Most exposed: construction, real estate, and any business whose customers borrow to buy the product — cars, homes, capital equipment. Most insulated: businesses with no debt and customers who pay cash.
The AI buildout complicates this in an interesting way. The handful of giant cloud companies — the "hyperscalers" — are spending around $725 billion on data centres and equipment in 2026, up 77% in a year, much of it borrowed. That's an enormous investment boom happening despite high rates, because the returns they expect still clear the hurdle, and it props up jobs in data centres, chips and power.
The borrowing has a side effect for everyone else, though. These companies raise the money by selling bonds, and they sell them to the same pension funds and investors who buy Treasuries. That pool of savings is huge but not bottomless, so every dollar that goes into a tech company's bond is a dollar not bidding at a Treasury auction. With fewer bids, the government has to offer a higher interest rate to sell its debt — and because mortgages and business loans are priced off that rate, they cost more too. It's the new competitor from Act 4, seen from the other side.
Interest now costs more than the military
Interest overtook defence in 2024, and the gap is widening: the United States now spends more servicing its debt than defending itself.
Here is what that actually means in plain terms. The government collects tax and spends it on things: roads, the military, Medicare, salaries. Interest is now one of the biggest items on that list — but unlike every other item, nobody votes on it. It's contractual. It gets paid first, automatically, before Congress debates anything else.
So a rising interest bill doesn't announce itself as a cut. It just means that out of every tax dollar collected, a bigger slice is already spoken for — sent straight to whoever holds the bonds — and a smaller slice is left for everything the government might otherwise choose to do. The alternatives are to raise taxes or to borrow the difference, and borrowing the difference means issuing more bonds, which brings us back to Force 1.
There's a distributional edge worth naming plainly. Interest payments flow to whoever owns the bonds — pension funds, wealthy households, and foreign governments, roughly 30% of it overseas. The taxes that fund those payments are collected broadly. Mechanically, rising yields are a transfer from taxpayers to bondholders.
The part that keeps professionals awake
Everything so far has been mechanical: rates go up, borrowing costs more. Here's the piece that makes bond investors uneasy, and it's a feedback loop.
Higher yields raise the interest bill. A bigger interest bill means the government spends more than it collects by an even wider margin. That gap has to be borrowed, so it issues more bonds. More bonds means the auction reaches further down the bid queue — and the clearing yield rises. Around again.
The ratchet that's already locked in
This isn't a slow-moving hypothetical, and here is the single most important chart on this page.
The government doesn't pay today's rate on all its debt. It pays a blended average of every rate it ever borrowed at — including trillions issued in 2020 and 2021 at 1% or less.
That average is currently 3.45%. New 30-year debt is being issued at 5.27%.
View as table
Even if the 30-year froze exactly where it is today, the interest bill would keep growing for years — as 1% debt rolls into 5% debt. The pain isn't a forecast. It's already contracted.
Why the obvious fixes are hard
Loops like this do end, by one of four routes. It's worth being honest about how plausible each one currently looks.
Most likely it's a muddled combination over years, with option 3 doing quiet work and option 4 held in reserve. But now you know what you're watching for, and why "they'll just cut spending" isn't an answer anyone in the market takes seriously.
Three things to watch
- Auction results. Every few weeks the Treasury sells long bonds. Watch the Total bids divided by the amount offered. Above roughly 2.5 means healthy appetite; below 2.0 is a warning. August's 30-year drew 2.39. and whether it An auction "tails" when it clears at a higher yield than pre-auction trading expected — the government had to pay more than the market thought to place its debt. A sign real buyers stayed away.. That's the market's live vote, in real money — and now you know exactly how to read it.
- Inflation prints. Monthly CPI. Sustained progress toward 2% would let the long end relax; renewed acceleration would not.
- The 10-year specifically. It's the one that prices your mortgage. Watch it more closely than the headline-grabbing 30-year.
This is an explainer about a mechanism, not advice about what to do with your money. Whether higher yields are good or bad for you depends entirely on whether you're a borrower or a lender, and on a personal situation no web page knows. What's worth taking away isn't a position — it's the ability to read the next bond-market headline and know exactly what it means for your own balance sheet.
The Fed sets the rate for borrowing overnight. An auction room sets the rate for borrowing for thirty years. Only one of those is the price of a house.