05/18/2026
A Quick Market Update
While there are a lot of variables impacting mortgage rates, of late it has been a broken record and it's all about oil. This week we saw oil prices spike, and interest rates around the world are soaring.
Pressuring yields higher are inflation fears driven by the surge in oil prices. It does not appear that any progress has been made on pressuring Iran to reopen the Strait of Hormuz. At least if there has been progress it's not being reported.
Times like this is where things will start to get very confusing for your clients. When inflation "fears" start to become inflation reality, we will need the Fed to step in and get inflation under control. So when you start to hear rumors about the Fed considering a rate hike, it's not time to panic.
After very hot CPI and PPI inflation reports this week, at the very least we know a rate cut is not happening any time soon.
I know it sounds crazy, but a Fed rate hike during inflationary times actually helps the mortgage bond market, and therefore mortgage rates, as it sends a message to the market that they are keeping inflation in control.
All eyes are now on our new Fed Chair, Kevin Warsh, who started his new job yesterday. And he's already in the hot seat...stay tuned.
