CR Note: This is related to my note earlier this week: The "New Normal" Mortgage Rate Range From housing economist Tom Lawler: The resiliency of the US economy in the face of the “aggressive” Federal Reserve rate hikes since last March, combined with an increase in inflation-adjusted Treasury (TIPS) yields to levels not seen in almost 15 years, have led a growing number of analysts to conclude that the so-called “natural” rate of interest (often referred to as “r-star”) has increased significantly. By “significantly” I don’t just mean back to the historically low levels just prior to the pandemic, but rather to levels closer to the period right before the financial crisis of 2008 that led to the worst recession since the Great Depression.