The Federal Reserve began a tightening cycle in March 2022 by increasing the so-called federal funds rate. But much earlier, in November 2021, Fed officials announced the end of their extremely accommodative policy during the pandemic. With this announcement, financial markets immediately priced-in an increase in the cost of borrowing in anticipation of a future higher policy rate path to combat inflation. The FRED graph above shows three different ways of capturing the impact that tighter credit conditions have on the financial burden of servicing mortgage debt. This burden is usually calculated in terms of a ... (full story)