Hospitals must provide complete and accurate price information to patients before they agree to an elective procedure, or they may find themselves in federal court, Andrew Ferguson, director of the Federal Trade Commission (FTC), said at a healthcare transparency forum on Oct. 5.
Emergency medicine center for trauma and critical care in Washington on Jan. 2, 2025. Madalina Vasiliu/The Epoch Times
Ferguson said he’d written to the CEOs of 24 of the nation’s largest healthcare companies, reminding them that the FTC has the power to enforce federal laws on unfair and deceptive pricing.
“Let me be clear: these letters are a warning. Healthcare providers must disclose their prices to consumers and must do so starting today,” Ferguson told forum attendees.
Hospitals have been required to publicly post price information since 2020, although only about half fully comply with that regulation, according to a recent report.
Even when posted, however, many of the online files are extremely large and may be difficult for consumers to navigate.
Lack of clarity will no longer be tolerated, Ferguson said.
“Hospitals cannot conceal the true cost of a procedure to prevent patients from shopping for better deals at competing facilities, and hospital price disclosures must be complete, accurate, and offered in advance of scheduled services,” he said.
A price can be deceptive if it either discloses or conceals information that might reasonably mislead a consumer, according to the FTC. That means prices must be clear and easily found by the shopper.
A price can also be deceptive when it omits critical information, like physician or facility fees, or it covers only part of the expense for services that would be provided for the patient’s care.
Inaccurate prices are deceptive, according to the FTC. When a reasonable person would conclude they’ve been told the entire cost of the service but they have not, the price is misleading.
Just 18 percent of hospitals that post their fees online list dollars-and-cents prices for at least half of their services, according to a September report from the group Patient Rights Advocate.
“Too many patients are still being denied the real, upfront prices they need to shop for affordable care and protect themselves from overcharges,” Cynthia Fisher, the group’s founder and chair, said in a statement.
Trent England, executive director of the conservative policy research group Save Our States, hailed the Oct. 5 announcement.
“Healthcare price transparency is one of the most obvious policies in American politics. That it has taken this long to guarantee patients and employers actual prices is absurd,” England said in a statement.
The warning letters were not based on a specific assessment of each of the 24 healthcare company’s practices, Ferguson said, but aimed to encourage the businesses to conduct an internal review to be sure they are not violating federal law.
Enforcement investigations into some hospitals are already underway though, Ferguson said, and the FTC is especially focused on what it deems vulnerable populations, which include rural Americans, seniors, and veterans.
“We will not rest until pricing transparency in healthcare is the universal norm,” Ferguson said.
Syria’s Jolani May Send Troops To Yemen To Fight Houthis
Syria is said to be “cautiously” considering sending troops to assist Saudi Arabia in the fight against the Houthis in Yemen, Reuters and others are reporting Wednesday.
An anonymous US official described that this was a focus of conversation between Syria’s self-declared President Ahmed al-Sharaa and Saudi Crown Prince Mohammed bin Salman as the two met in Riyadh on Tuesday.
Ironically it was the Saudis that heavily supported Sharaa’s rise and overthrow of Bashar al-Assad in the first place. Sharaa, previously known as Abu Mohammad al-Jolani was the founder and leader of Syrian al-Qaeda (Nusra Front, later Hayat Tahrir al-Sham). He had also fought Assad while initially under ISIS, and had taken control of Idlib.
via SANA
So while for many years foreign fighters flowed from Saudi Arabia into Syria, now the jihadi pipeline looks to go in the opposite direction.
The hardline Sunnis of the new Damascus government are well-known for viewing all Shiites as ‘apostates’ – and so there could be plenty of willing participants to go and fight the Houthis, who are Shia and backed by Iran. Some reports speculate there are already thousands of Syrian mercenaries as well as ‘volunteer’ fighters on the ground in Yemen.
“Options being considered include defensive aid to protect the kingdom from attacks, or deployment of forces in an offensive capacity to help Saudi-backed Yemeni troops fight the Houthis,” according to sources cited in the reports.
A US official has said that Riyadh has specifically requested the deployment of Syrian forces against the Houthis, perhaps as ‘payback’ for Saudi funding for the jihad in Syria over the prior decade.
However, a Syrian diplomatic source has also indicated Damascus is placing priority on its own continued problems inside the country, also given Israel currently occupies a swathe of southern Syria, and the economy has yet to rebound after years of US sanctions (recently lifted for post-Assad Syria).
Axios has noted in its reporting that Sharaa is “seriously considering it, but he hasn’t decided. Further, the Trump administration “not opposed in principle to such a move,” US officials cited in the same report said.
Below: Ansar Allah sources have meanwhile pointed out that Jolani’s militants are merely dozens of miles from Israeli positions and yet don’t fire a single shot toward them:
Sayed Abdel Malek Al Houthi: “The Saudis want to involve Turkey and Pakistan in the war. The Turkish context is to import the Takfiri Jolani gangs from Syria to Yemen. The Takfiri groups in Syria stand idle when Israel is 35km away but want to fight in Yemen” @sneako https://t.co/GjNgUuS1Ak
So it seems one additional benefit of the US-Gulf axis having a puppet in Damascus is that Syrian troops can be essentially used as fresh fodder to be thrown into regional proxy wars. It seems this is an option the Saudis are now pursuing, also as they seek greater military support from allies Islamic allies Pakistan and Turkey.
A cutting-edge new artificial intelligence (AI) tool can reconstruct images from a person’s vision simply by analyzing brain scans.
There’s our little test subject!
The technology recreates a person’s visual field with startling accuracy and can also predict brain activity by analyzing what a person is looking at in real time.
Professor Michal Irani of the Weizmann Institute of Science developed the “mind-reading” AI model Brain-IT, which interprets functional magnetic resonance imaging (fMRI) scans of participants’ brain activity as they view a series of images.
Irani and her team – which includes Roman Beliy, Amit Zalcher, Jonathan Kogman, and Navve Wasserman from Weizmann’s Computer Science and Applied Mathematics Department – released their research on Sept. 14.
While the current study used fixed images, Irani’s lab plans to test these so-called mind-reading methods on participants’ hearing and, eventually, on video.
“What remains especially challenging is decoding video – for example, during dreaming,” Irani said in a statement.
“Dozens of images change every second, while an fMRI scan takes about two seconds. If we overcome all these obstacles, it’s possible that in the future we may even be able to read dreams.”
The study reviewed fMRI scans of eight participants who had viewed thousands of images across 30 to 40 scanning sessions. Participants viewed around 40 images over roughly 10-minute sessions as researchers scanned their brains six times. This created roughly 73,000 image-fMRI pairs for the AI model to analyze.
Irani said other models can translate brain activity into images with “impressive reconstructions,” but that they often make basic composition and color errors.
“The new model we developed outperforms them in reconstructing both the content of the image and its details,” she said.
“What’s more, while every other model requires dozens of hours of brain scans to learn to ‘read’ a new person, our model needs only one hour,” she said.
Scientists have been working on similar technology for years. A paper published in the Journal of Law and the Biosciences in 2017 discussed the possibility of reaching “brain-based mind reading” with neuroimaging techniques.
The paper described how these techniques could be used for lie detection to assess defendants, prisoners, and prospective jurors in court cases to improve the legal system. However, it also notes that brain-based mind reading could have potentially unethical coercive uses.
Improvements in the signal data produced by fMRI machines and in how humans analyze that data in recent years have made this technology possible, according to Kenneth Norman, a psychology and neuroscience professor at Princeton University.
In a discussion with the American Psychological Association in 2022, Norman said the technology could help people with depression or anxiety.
Therapists could use neurofeedback to make participants aware that their thinking has drifted toward negative thought loops and then give them direction to try to control those mental patterns, he said.
Some neuroscientists have heralded the capabilities of Brain-IT’s AI model, highlighting how it could therapeutically help people suffering from neurological conditions. But others have raised concerns about how the technology could be abused to coercively extract information from a person’s mind.
15 Economies Sign US-Led Statement Against Industrial Overcapacity; China, Russia, Brazil, Saudi Arabia Sit It Out
Trade ministers from 15 economies, including the United States, South Korea and Japan, signed a joint statement to build sector-specific platforms addressing manufacturing overcapacity, the U.S. Trade Representative’s office said Wednesday, according to Seoul Economic Daily. The effort is effectively directed at China, which did not sign. The statement does not name the country.
Building on the productive discussions at the G20 Trade Ministerial in Milwaukee, fourteen economies joined the U.S. in signing a Joint Ministerial Statement that expresses our collective resolve to work together in new, dedicated sectoral platforms to address structural excess capacity and production in certain manufacturing sectors.https://t.co/HxSOijvjxu
— United States Trade Representative (@USTradeRep) October 7, 2026
USTR said 14 countries joined the United States: South Korea, Japan, Argentina, Australia, Canada, the European Union, France, Germany, India, Italy, Mexico, Poland, Turkey and the United Kingdom. The statement came out of discussions at the Group of 20 trade ministers’ meeting in Milwaukee.
Milwaukee serves as the blueprint for the future of the American economy, blending a strong manufacturing base, rich agricultural surroundings, and shipping access to the Great Lakes. From walking the factory floor at Rockwell Automation to touring one of America’s most iconic brands, Harley-Davidson, the G20 Trade Ministerial underscored the importance of protecting American manufacturing and accelerating our country’s reindustrialization. Thank you to @SecDuffy and @SecRollins for joining me in hosting the G20 Trade Ministers to highlight the success of @POTUS’ policies in supporting American farmers and manufacturers!
— United States Trade Representative (@USTradeRep) October 5, 2026
The statement says structural overcapacity, wherever it arises, distorts prices and production patterns, hinders innovation and competition, and can leave other countries open to economic coercion. It singles out existing and expected overcapacity in autos and electric vehicles, batteries, chemicals, foundational semiconductors and solar panels, which it says would cripple domestic industries, destroy jobs and lower living standards.
The signatories agreed to build new sector-specific platforms to examine overcapacity in those areas and take action. They also agreed to hold technical meetings before December to set the scope of the work and share information.
U.S. Trade Representative Jamieson Greer laid out the overcapacity case at the close of the Milwaukee meeting. The excess-capacity section starts at 14:36.
The Milwaukee meeting, held Sept. 30 to Oct. 1, covered four items: the weaponization of food, structural overcapacity, most-favored-nation reform and the elimination of forced labor from supply chains. Only a joint statement opposing the weaponization of food emerged, with no outcome documents on the other three. China’s Ministry of Commerce said most members held divergent positions.
As a result, only 15 of the G20’s members appear to have joined the overcapacity statement. China, Indonesia, Saudi Arabia, Russia, Brazil and the African Union did not sign. The G20 summit is scheduled for December in Miami.
A recent survey shows that a majority of young, Democratic women believe that “the challenges that women face in American society” are due in great part to the behaviors or actions of men.
Breitbart reports that data from the Survey Center on American Life offers a glimpse into the perceptions of young Democrat women, and suggests that third-wave feminism still has a significant grip on the younger generation.
26% of young Republican men blame their problems on women.
66% of young Democratic women blame their problems on men.
The survey reveals that 66 percent of Democrat women from the ages of 18 to 29 believe that the challenges women face in American society are “due in great part to the behavior or actions of men.”
By comparison, only 18 percent of Republican women in the same age range blame men for those problems.
Survey Center pollsters also found that 54 percent of Democrat women between the ages of 30 and 49 believe that the challenges women face in American society are “due to the behavior or actions of men” as well, while just 23 percent of Republican women in that age range agree.
Those disparities generally shrank as women grew older, with fewer Democrats blaming men and more Republicans blaming them.
The survey reported:
Do men see things the same way? When men were asked whether women were to blame for the troubles men faced, only 16 percent agreed. Republican young men are more likely than Democratic young men to blame women for the challenges that men face, but only 26 percent do.
Political scientists and analysts report that these statistics reflect an escalating partisan polarization among Gen Z and millennial demographics.
The gender-political alignment has grown more rigid, with 2026 data indicating that 66 percent of all young women identify as or lean Democratic, while young men have progressively shifted toward the Republican Party.
Researchers tracking these trends have expressed concern that the ideological divide could increasingly impact modern relationships and family formation.
Breitbart reports that the survey coincides with an August Economist/YouGov survey examining cultural norms, which found that American women in general are split on whether they would rather pursue a career or care for their family at home, if given the choice.
In that survey, most Democrat women, 52 percent, said they would choose a career outside the home over staying home to care for their family.
More Ukrainian-Style One-Way Attack Drones Seized In Mexico
The emergence of fiber-optic one-way attack drones among Mexican cartels signals a troubling security threat just south of the US border.
Images published by local outlet Luz Noticias show that the Mexican Army seized Category 1 suicide drones with fiber-optic cable reels and improvised explosives. This is sparking ongoing concerns that low-cost attack drones associated with the Ukraine-Russia war and the US-Iran conflict are spreading to narco-terrorists in the Western Hemisphere.
Mexican troops found 15 drones and more than 40 improvised explosive devices in the municipality of El Rosario during security patrols on Monday. The municipality is situated in southern Sinaloa.
Here’s what the outlet said:
During the inspection , Mexican Army personnel located and seized drones , drone controllers , fiber optic cables, batteries, improvised explosive devices , chargers, cartridges, long guns , tactical vests, and ballistic plates.
The three long guns seized are AK-47 rifles , better known as Goat Horns , which were allegedly used for clashes between organized crime factions.
The latest development builds on our mid-July note that Ukrainian-style drones were found in a raid deep inside north-central Mexico.
Reuters cited US Army Brigadier General Brian Filler, deputy commander for operations at Joint Task Force Southern Border, who told reporters Monday that the military had detected 378 drone incursions in the last 30 days and that the trend was increasing.
“We are seeing largely commercial off-the-shelf available drones,” Filler said, adding that most carry surveillance cameras and are often observed alongside cross-border movements.
The US urgently needs low-cost counter-UAS assets to protect military bases, government buildings, stadiums, critical infrastructure, and data centers. The list is really endless.
The New York Times has decided the open question in science this week is whether a baby is conscious. Not a cluster of cells. Not a theoretical model. An actual newborn baby.
Carl Zimmer’s 5 October piece, “Are Babies Conscious?” (yes that’s a real headline) walks readers through a lab test and then informs them that a “squirming, gurgling infant” does not seem conscious, “at least not in the way adults are.”
Zimmer’s setup is the oddball-sound test. A subject hears three low tones and a high one, over and over, then a run of four low tones. Adult brains throw a brief, distinctive blip at the break. People in a coma do not. People who are asleep do not. The Times then puts a newborn in the same frame and asks whether the blip will be there.
Are Babies Conscious? As scientists map the birth of consciousness, they hope to gain a better understanding of how it evolved in humans in the first place. https://t.co/g1D5A4wRtF
The paper calls it an active scientific debate. Dr Topun Austin, a neonatologist at the University of Cambridge, is quoted defining the thing under study: “Consciousness is a process of being receptive to the outside world and mixing that with our own internal world, to create the feeling of who we are and where we are.“
A caption under the piece states that there was a time when our brains were too rudimentary to support consciousness. Zimmer’s own promo line said he had found scientists “on a mission to find out when consciousness begins in babies.”
The reaction online was immediate, and it was not about neuroscience. It was about where the line moves next.
@ModernityNews Ever get the feeling we’re living inside a cautionary tale?
Like we’re all just trapped in a dystopian ’70s sci-fi movie, while Charlton Heston screams about the sanctity of human life? pic.twitter.com/oxA1EaZhXJ
Give this a few more years and they’ll claim consciousness doesn’t begin until the baby is one years old, so abortion should be legal up to that point. pic.twitter.com/hLxMdTzZzC
All this is going on while we’re debating whether ‘machines can be conscious’, a disturbing irony.
Incredible that we’re debating whether “machines can be conscious” while Democrats still haven’t acknowledged that babies in a mother’s womb have consciousness.
Of course, there are countless studies that indicate infants, even unborn infants have consciousness as we understand it.
In January, neonatologist Carlo Bellieni of the University of Siena published “A Rudimentary Consciousness Appears in the Late Fetal Period” in EC Gynaecology, reviewing 31 clinical trials from the last decade on fetal anatomy, perception and memory. His conclusion: the early appearance of memory is a sign of rudimental consciousness, and it does not depend on whether the fetus is inside or outside the womb, only on the grade of brain development.
HUGE!
Unborn babies experience consciousness.
A new study was published in a peer-reviewed medical journal. A neonatologist reviewed 31 clinical trials from the last decade and confirms babies before birth are conscious.
Bellieni’s account of the hardware is specific. “Intrauterine life includes structures which, at least partially, replace the developing cortex, that the fetus begins to form around 20 weeks of gestation. These structures are the subplate, useful for most sensations, and the thalamus for pain. … We can realistically say that the first sensations are perceived by mid-pregnancy.”
Fetuses in the trials preferred carrot-flavoured amniotic fluid to kale, responded more to face-like patterns, and touched the uterine wall longer when the mother touched from outside. Magnetoencephalography work found fetuses at 35 weeks and older detecting breaks in tone patterns. The old claim of continuous fetal sedation does not survive the blood chemistry or the sleep-wake cycling.
That sits on earlier research. In 2023, Tim Bayne, Joel Frohlich, Lorina Naci and colleagues published “Consciousness in the cradle” in Trends in Cognitive Sciences. Bayne put the split plainly: researchers disagree on whether consciousness arises early, at birth or shortly after, or late, by one year or much later. “Nearly everyone who has held a newborn infant has wondered what, if anything, it is like to be a baby.”
The review’s own reading of network connectivity, attention, multimodal integration and cortical responses to global oddballs was that consciousness is likely in place in early infancy and may begin before birth. Naci, who leads Trinity College Dublin’s Consciousness and Cognition Group, said newborns can integrate sensory and developing cognitive responses “into coherent conscious experiences to understand the actions of others and plan their own responses.”
A 2025 Science report on the Infant Consciousness Conference at NYU recorded the same shift. Bioethicist Claudia Passos-Ferreira, who co-organised it, said fetal consciousness would have been a less central topic at a meeting like that a few years earlier. Preliminary survey results from the room: 47 percent placed the first development of consciousness in the later prenatal window, from about 24 weeks to birth.
A 2026 survey in Neuroscience of Consciousness, of attendees at two leading conferences, found a majority favouring the view that newborns are conscious, and a plurality favouring emergence after 24 weeks of gestation.
In June, New Scientist reported that the fetal connectome already shares 61 percent of the functional organisation of an adult brain. Bayne’s line there: “There certainly could be snippets of experience before birth, and the capacity for consciousness is probably there.”
None of this is a claim that a six-week embryo writes poetry. It is a claim that the “are they even aware?” framing, applied to born infants and late-term fetuses, is behind the data the same research community has been publishing.
The same day the Times asked whether babies are conscious, LifeNews republished a shocking case that makes the question obscene. A boy at 21 to 22 weeks, about half a pound and the size of a hand, survived an abortion at Christ Hospital in Illinois and lived for 45 minutes. The baby was taken to a soiled utility room because his parents wanted nothing to do with him. There was no care. No intervention.
Nurse Jill Stanek later told a U.S. Senate committee she could not leave him to die alone. “I could not bear the thought of this suffering child dying alone, so I rocked him for the 45 minutes that he lived.” He was old enough to gasp for air. He was not old enough, under the logic now being laundered by the New York Times, to count as a human being.
State health figures cited around the same reporting put at least 40 babies born alive after botched abortions in Minnesota, Arizona and Florida between 2016 and 2018, and CDC data at least 143 between 2003 and 2014.
In August, Massachusetts legalised abortion up to birth, and the applause came from the same political class that treats viability as a clerical error.
In March, the UK House of Lords rammed Clause 208 of the Crime and Policing Bill through and decriminalised self-induced abortion at any stage. A YouGov survey found 1 percent support for abortion up to birth. A Whitestone Insight poll found 62 percent saying abortion should remain illegal after 24 weeks, and 53 percent saying it should not be an option if the baby could survive outside the womb. GB News put the gap in one line: “Just 1% of the public agree with this… and yet it has now made it into law.”
A country that will arrest someone for silent prayer outside a clinic has arranged the law so that healthy, fully grown babies can be killed without a criminal consequence for the woman.
In March of 2025 the Trump administration moved to cut federal money to Planned Parenthood, which took an average of $592 million a year from taxpayers between 2019 and 2021, more than 40 percent of revenue, while performing 1.11 million abortions in that window.
Anyone who has held their own newborn, or any newborn for that matter, and witnessed the child’s curious glare, the tight grip of their hand, and felt the intense emotional connection knows that babies are conscious. The New York Times deciding to ask whether they are or not does not make it a real debate.
We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.
Pezeshkian Calls On Iranians To Ration Electricity, ‘Stand Up’ To US, As Negotiations ‘Stalemated’
Saudi Arabian state-owned outlet Al Hadath is reporting what many might consider obvious: Stalemate in mediation efforts between Washington and Tehran, the source reports Wednesday.
US officials are continuing to tell Tehran that there will be “no progress” in negotiations until there’s progress on the nuclear file and that Hormuz is no longer a priority after Iran “lost control of it”.
via AFP
And yet, there’s been possibly a dozen or more Iranian drone attacks on foreign vessels transiting the Strait of Hormuz in the last eight days.
All of this comes as President Masoud Pezeshkian has urged the Iranian public to ‘stand up’ against the US and West, as Washington’s sweeping sanctions as well as US naval blockade actions against Iranian ports continue to bite.
“We must not allow the production cycle to be damaged. We will reduce the consumption of electricity, gas, gasoline, water and other energy sectors,” he said to semi-official Fars news agency.
“The condition for resistance and standing up to the West is for everyone to endure hardship,” Pezeshkian added, saying that “if necessary, cultural and sport complexes will be closed in Iran to provide electricity and energy needed for industrial production” – as the US blockade hammers Iran’s economy.
The rial has cratered, and the fallout has begun to severely impact neighboring Iraq and its Tehran-aligned economy and government, as we previously detailed.
Fars also quoted Pezeshkian as saying Wednesday, “Iran is fully prepared to reach a balanced and fair agreement that ensures lasting peace and security in the region.”
“Our red line is the national interests and rights of the Iranian people. If the United States adheres to international legal frameworks, reaching an agreement is not out of reach,” he added.
There’s also this admission (but which could also be interpreted as pushback) from Iranian state media, in the face of Scott Bessent’s recent assertions that Iran’s crude exports have fallen to near ‘Zero’:
Iranian media is reporting a 60 percent decrease in oil passing through the Strait of Hormuz, saying that the flow of crude oil has faced a significant drop in the last two days, reaching around 3.8 million barrels per day.
The weekly average of oil passing through the Strait is estimated to be about 9.3 million barrels per day, Tasnim news agency said.
The claim comes as an IRGC adviser said that the strait is “fully controlled” by Iran and will remain closed until the US accepts its demands, adding that the volume of oil currently being smuggled out is “very small”.
But ultimately, Iran is admitting it is enduring severe economic hardship amid a heavily sanctioned wartime economy.
There’s a battle of narratives over Hormuz and markets as well as mainstream Western media are simply favoring once side while ignoring the claims of the other at this point:
IRAN WAR ANALYSIS: It is VERY obvious now that the Iranians were simply not TRYING to strike vessels transiting the Strait of Hormuz in recent weeks. 13 vessels have now been struck just in the last 8 days, and most importantly of all, many of these vessels have been completely disabled, set ablaze, or blacked out. This is a disaster.
The stalemate looks to endure past the November midterm elections in the US, as even President Trump has seemed to lately suggest this status won’t change until after the US vote. He has also signaled a heavy bombing campaign against the Islamic Republic could ensue by November’s end.
From 3-Year Lows To 3-Year Highs In Nine Months: Mortgage Rates Surge To 7.49% As Bond Rout Hits Main Street
Last December, we wrote that mortgage rates had dipped to 3-year lows. Nine months, one Middle East war and one global bond rout later, they are at 3-year highs.
The culprit is not exactly a mystery. Mortgage rates track the 10Y Treasury, and the 10Y just had its biggest quarterly jump since 1994, hitting 5.34% last week, the highest since 2002. And with the long end leading the latest leg of the selloff, this morning the 30Y climbed to 5.70%, also the highest since 2002, while the 10Y was trading around 5.32%.
Below we look at why the bond rout has finally landed on Main Street, what it is doing to housing (spoiler: nothing good), and why the sell-side’s perennial “yields will fall from here” call is now 0 for 9.
Follow The 10Y (Then Add A War)
As Reuters notes, home borrowing rates are up about 1.4 percentage points since US-Israeli strikes against Iran began in late February, closely tracking the jump in the 10Y yield, which was back above 5.3% on Monday. The drivers are the usual suspects: inflation fears from triple-digit oil (Brent was back above $101 this morning as Iran stepped up attacks on Hormuz tankers), surprisingly resilient growth, a Fed that is now hiking, and a bond market that has to absorb record Treasury supply and the AI debt binge at the same time.
And it’s not just a US story. On Monday, we put out this chart showing that global 10Y+ bond yields are now the highest since 2002:
Translation: the global bid for duration is gone, and the US homebuyer is the marginal price-taker. Yesterday’s subpar 3Y auction priced at the highest yield in 20 years as foreign demand slumped, and today the Treasury tries its luck with $39BN in 10Y paper at 1pm.
Today’s MBA data confirms it. Mortgage applications fell another 4.2% last week, with refinancing applications dropping sharply. Overall application volume is now the lowest since February 2025, and has collapsed by nearly 50% since January. Or, in the dry words of MBA deputy chief economist Joel Kan, very few homeowners have an incentive to refinance “at these rates“, while the jump in borrowing costs has pushed many would-be buyers out of the purchase market altogether.
Some napkin math shows why. On a $400,000, 30-year mortgage, principal and interest at 7.49% comes to roughly $2,794 a month. At the ~6.1% that prevailed before the war, it was about $2,424. That’s $370 more every month, or 15%, for the exact same house – and 68% more than the borrower who locked in at the 2021 lows (who, naturally, is not selling).
That last point is the real problem. The lock-in effect, which was finally starting to ease over the summer as inventory approached prepandemic levels, is now back with a vengeance: sellers with 3% mortgages have zero reason to move, and buyers facing 7.5% have every reason to wait. Even BofA’s REIT team, in its weekly U.S. REIT Weekly (available to pro subs), cites persistently high mortgage rates and elevated for-sale housing costs as a key reason renters are staying put longer – good news for apartment landlords; first-time buyers might see it differently.
Not that the administration isn’t trying. Just last Thursday:
Mortgage rates rose 19bps that week. The bond market, it seems, did not get the memo, or more likely got it and sold anyway.
“Rates May Be Biting”
So where do we go from here? According to BofA’s rates team led by Mark Cabana, the selloff only ends when it starts to hurt. In his latest Global Rates Weekly, “Start of rates bite” (available to pro subs), Cabana writes that the impact of higher rates is starting to bite broader financial conditions, with spreads widening in OATs, the EU periphery and US high yield, before adding:
“Rates restricting financial conditions is a precondition for the selloff to stop (unless macro data softens first). Central banks are starting to push back but will only be credible if conditions stay tight / tighten further or upcoming data softens.”
In other words, the cure for high yields is… a housing market that stops working. Mission, at least partially, accomplished.
Notably, September’s selloff was concentrated in the US: BofA calculates the US 2-10Y sector rose 50bps last month, a 2x standard deviation move in the 10Y, as global central banks swung from pricing cuts in Q1 to 100bp+ of hikes in most regions. BofA still expects the Fed to hike 75bps between September and December, and only sees the 10Y ending the year at 5.00%.
Then there’s the mortgage-specific part of the equation. As BofA’s securitized team led by Chris Flanagan notes in its September returns review (also available to pro subs), Agency MBS delivered a -3.3% total return in September and -1.0% in excess returns versus Treasuries, underperforming even IG corporates (-2.6%). And the bank isn’t rushing to buy the dip: it stays “basis-neutral” on agency MBS and would only turn more positive if the current coupon spread, now 120bp, widens to the 125-130bp area.
Put differently, even the professional buyers of mortgage paper want more spread on top of a 10Y that is already at a 24-year high. Which means that unless Treasuries rally hard, the path of least resistance for mortgage rates is even higher.
Strategists: 0 For 9 (And Counting)
Of course, if you ask Wall Street, relief is just around the corner. In a Reuters poll of nearly 60 fixed income strategists conducted October 5-7, the median forecast has the 10Y easing to 5.00% by year-end, 4.90% in six months and 4.75% in a year.
The same strategists have underestimated the 10Y in nine straight monthly polls this year, and got the direction mostly wrong in six of the most recent months. Perhaps sensing this, all but 2 of 30 forecasters surveyed said the 10Y is more likely to overshoot their forecast than undershoot it near term, which is a remarkably candid way of saying “we have no idea, but probably higher.”
The more honest take came from BofA’s own US rates strategist Meghan Swiber, who told Reuters rates have entered “a different regime” from anything since the GFC, and that a Fed which fails to tighten financial conditions will pay for it through higher long-term rates.
Midterm Math
All of this lands four weeks before the November 3 midterms. A Reuters/Ipsos poll completed Monday found the cost of living is the top issue on voters’ minds, which helps explain why Trump’s approval rating sits at a record low 32%. With PCE inflation at 3.4% in August and the Fed signaling another hike by year-end after September’s increase, the White House is running out of levers: today Trump said he is considering suspending the federal gas tax. Expect the “lower mortgage rates” talking points to get louder. Expect mortgage rates to ignore them.
Bottom Line
BofA’s Cabana frames the endgame neatly: the selloff stops when rates restrict financial conditions, or when the data rolls over first. In housing, that test is already being passed with flying colors: applications are down by half this year, showings have stopped, and refis have all but vanished.
The question is whether the bond market cares, after all it is financing AI hopes and dreams that may (perhaps) materialize sometime in the 2030s with an ROIC that isn’t negative triple digits. In other words, the runway for said hopes and dream is long and much more debt will flow before it reverses. Until then, however, broader rates will keep rising and rising, as the US now directly competes with data centers (most of which will never be plugged into a grid that simply can not support that kind of electricity demand) for funding.
With oil back above $100, the Fed hiking, Japan repatriating, France going all PIIGS on the OAT market and Treasury supply only going one way, we think the more likely outcome is that 7.49% is just another waypoint, and hardly a peak – and that the strategists’ “5% by year-end” joins the previous eight forecasts in the bin.
Then again, stocks closed at a record high yesterday, so maybe everything is fine… just don’t try to buy a house.
One-Year Inflation Expectations Jump To 3 Year HIgh: NY Fed Survey
Americans’ expectations for inflation over the near-tern jumped last month while their sentiment toward the labor market improved, the latest NY Fed Federal survey of consumer expectations showed on Wednesday.
Consumers’ estimates for inflation one-year ahead rose to a median 3.9% in September, up from 3.6% the prior month, reaching the highest level since May of 2023. At the same time, inflation expectations increased 0.1% to 3.3% at three-year horizon, and were unchanged at 3.0% at five-year horizon.
Over the next year consumers expect gasoline prices to rise 4.8%; food prices to rise 5.5%; medical costs to rise 9.2%; the price of a college education to rise 7.5%; rent prices to rise 6.8%
While the inflation outlook deteriorated, views on the labor market improved as workers saw a lower probability of losing their jobs and higher odds of voluntarily quitting, the New York Fed’s monthly consumer expectations survey showed. The proportion of respondents expecting the overall unemployment rate to rise in the next year fell fractionally to around 44%. Their perceived chances of finding a new role in the next three months if they lost their current job increased to 46%.
Consumers’ expectations of losing their jobs in the next year fell, with the outlook improving the most for workers between 40 and 60 years old and with annual household incomes above $100,000. Chances of leaving a post voluntarily also rose, especially among workers without a bachelor’s degree and above 40 years old.
Released less than a month away from the November mid-term elections, the New York Fed data is the latest survey highlighting Americans’ persistent pessimism around an economy that’s according to government data is expanding, if only for data centers and affiliated workers and billionaires. Separate data released in recent weeks showed that consumer sentiment fell to a four-month low in September and the unemployment rate rose slightly but remained historically low.
That’s the good news: the bad news is that the survey also found that year-ahead earnings growth expectations fell back to 12-month average of 2.6%. At the same time, the survey showed consumers’ perceptions of their own finances worsened for the second straight month. Around 42% of households said their situation is much or somewhat worse than a year ago, while around 18% said it had improved. More households also said they expected their financial outcomes to worsen in the year ahead, and more consumers now say it’s harder to get credit than it was a year ago.
With inflation expected to jump, consumers are finding ways to keep their wallets open. Expected spending growth for the year ahead rose to the highest since May 2023, up to 5.5%, an increase that was broad-based across age and education groups. Consumers continue to expect their spending growth to outpace their income growth. At the same time, perceived chances of missing a debt payment over the next three months fell slightly to 12%.
A smaller percentage of consumers, 12.20% vs 13.16% in the prior month, expect to not be able to make minimum debt payments over the next three months
