What’s Happening?
All news below is color-coded as “good“, “bad“, or “neutral” for mortgage rates.
•Geopolitics (improved, but still bad for rates): Since the Iran war started, several rounds of peace talks, a ceasefire, and the re-opening of the Strait of Hormuz have been on the horizon. None have completely stuck, but it seems we’re on the path of progress. Mortgage rates will continue to remain elevated until the Strait is fully opened and the conflict subsides.
•Brent Crude Oil Prices (bad for rates while elevated): The Iran war has pushed crude oil prices up by 50%, currently at about $105/barrel. Oil prices affect all aspects of the economy and interest rates are expected to remain elevated as long as the oil price does too.
•Jobs Report (good for rates): The March 2026 jobs report showed a stronger-than-expected gain of 178,000 new jobs (vs 60,000 expected), bringing the unemployment rate slightly down to 4.3%. Job gains were primarily driven by health care (+76,000), construction, and transportation, representing a rebound from a weak February, which was revised to be even worse than originally reported, now showing a loss of 133,000 jobs, down from -92,000 jobs. A three-month average of +68,000 jobs indicates a slower pace than the previous year so this can support the Fed moving towards cutting rates.
•Unemployment Metric (neutral for rates): Unemployment in March ticked back down from 4.4% to 4.3%. There hasn’t been any meaningful change in this metric in 2026, having little effect on rates.
•Inflation Report (neutral for rates): The March CPI was released on April 10th, the first report since the spike in oil prices. The CPI report showed average prices rising 0.9% since February (normally 0.2%-0.4%) and 3.3% from 1 year ago. That monthly increase is driven largely by a 10.9% jump in energy costs, particularly a 21.2% rise in gasoline prices. And the annual increase is the largest we’ve seen in 2 years. Rates didn’t jump due to this report because rates rose in the weeks prior when oil spiked, so this CPI report was well within expectations, and hopefully is a temporary spike while oil prices remain elevated.
Price inflation is limited to fuel for now, since the core CPI (which excludes food and energy) rose only 0.2% from February. Oil prices are a factor in all prices, so I expect core CPI to rise in the coming months.
