Monthly Rundown time! This one is not a fun one though. Since my last update, rates have climbed half a percent. Yikes! Read on for what caused this. I try to shout from the rooftops when it is a good time to refinance. This is NOT one of them. I’ll let you know next time we see one.
March Fed Meeting:
At the March 2026 Fed meeting, the Fed held rates steady and continued their cautious tone as inflation remains an issue. Recent inflation is still running above target, with February CPI at 2.4% year-over-year and core measures between 2.7–3.1%. On top of that, Fed officials raised their inflation outlook to 2.7% for 2026, signaling less confidence in disinflation. Combined with rising oil prices, the Fed emphasized their “wait-and-see” approach, indicating they’re not ready to cut again until inflation shows clear progress. The next expected Fed Rate Cut is September of …. 2027! You read that right. The market isn’t expecting much from the Fed this year, even with a new Chairman starting in May. There is a positive to this: if we do get a cut this year, interest rates (including mortgage rates) should decrease.
Yeah but the Fed Meeting didn’t move rates that much, right?
Correct. Since the start of the Iran war, 30-year mortgage rates have climbed 0.5% (from 5.99% to 6.5%) as markets price in “higher-for-longer” inflation risk. The quick and easy explanation is that oil prices up → inflation up → Treasury yield up. As the conflict has escalated and disrupted oil supply, oil prices have spiked and drove renewed inflation fears. That has pushed 10-year Treasury yields higher, which mortgage rates directly track. Unlike a typical geopolitical shock (which can lower rates via a higher demand for bonds), this one is inflation-driven, so it’s actually pushing mortgage rates up. The tricky thing here is that this war could deescalate and rates could drop 0.25% overnight. The reverse could easily happen too though…
The third piece of the trifecta:
An under-the-radar driver of increasing mortgage rates right now is widening spreads due to increased market volatility and risk. Remember that mortgage rates are determined via two main components: the 10-year treasury yield plus a spread. Even if the 10-year Treasury isn’t moving much, lenders are pricing loans higher because investors are demanding more yield to invest in today's choppy market. The result is borrowers seeing higher rates than you’d expect based on Treasuries alone, a sign that it’s not just the direction of rates, but risk pricing in the mortgage market itself, that’s pushing costs up.
Let me know any mortgage questions I can help with!
Monthly RUNdown - February 26, 2026
