The benchmark 10-year Treasury yield rose above 3.8% Friday morning and stayed there into the early afternoon, suggesting possible upward pressure on mortgage rates. Late Thursday the Federal Reserve surprised the markets by raising the discount rate it charges its member banks, citing improvement in financial market conditions. However, the Fed said, "The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy, which remains about as it was." The 10-year has been as low as 3.6% this month but has been on average closer to 3.7% recently.
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