Analysis
First Half of 2026 Analysis
In this episode
Getting caught up on the first half of 2026 market action. Inflation was trending downward and positive conditions were showing until the Iran conflict started. We explain how that affected mortgage rates.
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Show notes
Rates were steadily working downwards as inflation began to stabilize under 3%. Then the Iran conflict started and oil futures shot up along with inflation expectations. Rates have moved up the longer the conflict remained. It shows the importance of energy costs on our global economy. Full blog post here.
The part worth repeating
Rates move with inflation and/or inflation expectations, not the federal funds rate. The federal reserve is reactionary, and even though inflation hasn’t risen anywhere close to levels of 2023, markets did price in the move upward.
Common questions
How long will this last?
Until the conflict ends or until oil suppliers adjust. The importance of the Straight of Hormuz has been on full display, with as much oil as is transported through it, oil supply lines will adjust to keep back up with demand. So the conflict ending or supply lines changing, whichever comes first will relieve pressure on oil prices.
Mentioned in this episode
- CPI data from Bureau of Labor Statistics
- Oil prices from oilprice.com