Homeowners face prolonged mortgage pain as surging bond yields delay rate cuts until 2028

ANALYSIS Alarm bells are ringing for Aussie homeowners as economic headwinds point to higher interest rates for longer, even as home values potentially fall by 15 per cent or more. And many of the key factors are out of our control. There are a few things that have me particularly worried. First, let’s take a look overseas. The US Federal Reserve this week raised rates for the first time in three years. This was a unanimous decision by the committee, even with new chairman Kevin Warsh, a personal choice for the role by President Trump, who has been piling pressure on the Fed for rate cuts instead of hikes. MORE:RBA governor issues grim warning The decision was forced by sticky inflation, as the war in Iran drags on, keeping pressure on oil supply. At the same time, the AI boom has put fresh pressure on inflation numbers, as companies invest massive amounts of money into AI infrastructure, through premium wages to workers, huge demand for raw materials, utilities and tech equipment. Federal Reserve Chair Kevin Warsh speaks after rates were raised for the first time since 2023. Picture: Andrew Harnik Those factors are affecting the whole world. And unfortunately they’re not going to ...