Mortgage rates are lower today after the market finally digested the first Fed rate hike since 2023.
The Federal Reserve hiked its short-term rate 0.25% yesterday, leading to a temporary drop in mortgage rates, followed by a snap back higher.
That had a lot of folks fearing for the worst, but today it’s a different story.
MBS prices are up and mortgage rates are down, as most expected them to be.
And things could get even better for 30-year fixed mortgage rates, even if the Fed hikes another 0.25% later this year.
Mortgage Rates a Rollercoaster Ride Over the Past 24 Hours
It’s been a weird 24 hours or so for mortgage rates, which initially got relief from the Fed’s FOMC announcement, then got worse after Fed chair Kevin Warsh’s presser.
But today it’s a different story, with bellwether 10-year bond yields a lot lower (at last glance about 5 bps lower), which bodes well for consumer mortgage rates.
The 30-year fixed hit a fresh 2026-high of 7.24% after the press conference yesterday, per Mortgage News Daily.
That had many fearing for the worst, but today it’s a completely different story.
MBS prices are a lot stronger, oil prices are down, and things are looking up (actually down!) for mortgage rates.
Sometimes it just takes a little bit of time for things to shake out. Sometimes it’s not about the Fed at all.
And that’s actually something I want to point out.
Does the Fed Even Matter?
While everyone is fussing about the Fed, what’s happening behind the scenes matters more.
The reason the stock market is rallying today, bond yields are lower, and mortgage rates are improving is because of the situation in the Middle East.
The price of U.S. crude fell below $100 per barrel today for the first time since September 11th, and there are whispers that Trump plans to hold talks again with Iran.
Imagine if they iron out some sort of deal there? Who cares if the federal funds rate is 0.25% higher than it was in 2023?
If we can agree to some sort of truce with Iran and Yemen, all of a sudden you’ve got a much better outlook.
You’ve got falling energy prices, you’ve got falling bond yields, which are now close to 20-year highs.
Then you can actually see a scenario where mortgage rates are falling while the Fed is in hiking mode.
And back to the Fed, they could still hike one more time, as is laid out in their latest dot plot, and longer rates could fall.
While the Fed rate hike seems bearish and hawkish, it’s actually telling the market that the Fed is serious about combatting inflation.
And inflation is the #1 enemy of bonds and mortgage rates.
So Warsh essentially established credibility yesterday, instead of succumbing to President Trump’s demand to “lower rates NOW.”
Taken together, mortgage rates could have a really good 2027.
[Check out my mortgage rate calculator to compare rates side by side.]
What If Middle East Conflicts Worsens?
Now that’s just one rosy scenario. If things don’t improve or get worse, inflation could ramp up again.
The price of gasoline and diesel could get even more expensive, sending shockwaves throughout the economy.
That could lead to more rate hikes than anticipated, while also putting additional pressure on the 10-year bond yield that dictates mortgage rates.
If that’s the case, things could get worse before they get better, and a 30-year fixed in the low 7s will quickly be missed.
Then you’re looking at 30-year fixed mortgage rates in the mid-7s or higher.
Hopefully it doesn’t come to that, but it’s something to consider.
And it tells you that the Fed aside, mortgage rates could move up or down regardless of this hike and future hikes.
It’s really the underlying data that matters, whether it’s oil prices, unemployment numbers, etc.
So keep a closer eye on that than the Fed if you want to know where mortgage rates go next.
- Maybe Mortgage Rates Did Like the Fed Rate Hike After All - September 17, 2026
- What Will Today’s Fed Rate Hike Mean for Mortgage Rates? - September 16, 2026
- Is Chase’s Mortgage Rate Sale a Good Bet on Lower Interest Rates in the Near Future? - September 15, 2026