Mortgage Rates Today, August 13, 2026: Another Inflation Report This Morning!

The bigger picture

Mortgage rates yesterday fell modestly. That was largely because markets greeted that day's consumer price index (CPI) with immense relief.

The CPI report came in precisely as expected, so, for once, it wasn't the gap between actual figures and market expectations that caused the fall; just relief.

Today's producer price index (PPI) is much less influential than its big sister, the CPI. But, especially if it confirms the CPI's trend, it might still nudge mortgage rates today lower.

Scroll on down for more details about today's economic reports and how they might affect mortgage rates.

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What's coming up?

Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning the war, employment, inflation, tariffs, and deficit funding are especially influential at the moment.

The war and mortgage rates

Peace talks with Iran or mediators have been underway since Aug. 1 and initially helped mortgage rates fall moderately. While we all know how fragile such negotiations are and how hard it is to make deals stick, markets seemed happy to work with the hope of an end to the conflict. However, that hope seems to be fading.

"Over the weekend, Mr. Trump said his new strategy was to be 'low-keying it' in Iran, a suggestion that he wants to pressure the country into making a favorable deal without taking major military action," said The New York Times on Monday.

Iran is certainly in a weak position economically, and waiting for it to buckle may well be a smart way to resolve the conflict. However, markets are anxious for a rapid reopening of the Strait of Hormuz, and seem to have taken the president's new position as a sign the dispute could drag on for considerably longer than previously expected — hence this week's higher oil prices.

Mortgage rates respond to war news because a prolonged closure of the Strait of Hormuz could again choke off 20% of the world's oil supply, putting additional pressure on gas, diesel and many other prices. It would take years to build the infrastructure necessary to bypass the Strait completely.

Strategic petroleum reserves in the U.S. and elsewhere globally are now at multi-decade lows, meaning there's less room to cushion consumers from rising gas prices. It may not feel like it, but this method of suppressing pump prices has been in place since the start of the conflict.

Trading Economics says, "US Strategic Petroleum Reserve crude inventories fell to 307.650 million [barrels, presumably] for the week ending July 24, marking the lowest level since 1983."

Meanwhile, many oil refineries in the Middle East and Russia are out of commission due to damage from the separate wars involving Iran and Ukraine. That began by sending oil prices lower on most days (though less consistently recently). Why buy crude oil when you can't refine it?

Unfortunately, that has so far translated into only moderately lower gas and diesel prices because a lack of refining capacity exacerbates rather than moderates supply issues for consumers and businesses, while demand remains fairly steady.

Of course, any sudden good news from the Middle East could still send mortgage rates tumbling, regardless of that day's economic reports. Unfortunately, sudden bad news could send them soaring.

The Fed

The Federal Reserve's rate-setting body (the Federal Open Market Committee or FOMC) left general interest rates unchanged on Jul. 29, as many expected. However, many now think a hike is likely at the next FOMC meeting on Sep. 16, according to the CME FedWatch tool.

Still, that's been changing. Yesterday evening, that tool showed a 40.1% chance of a small hike, while on Tuesday evening it stood at 48%.

That change was down to markets hoping that yesterday's CPI would allow the FOMC to hold general interest rates steady at its next meeting. It won't harm those chances, but the Fed will have seen August's CPI and PPI by the time the committee next meets.

Assuming that the war in Iran doesn't end quickly, we think a small hike remains a sensible expectation for Sep. 16. A prolonged conflict is likely to fuel inflation, and the Fed has a duty to maintain that at 2% annually, a goal reaffirmed by Kevin Warsh, the new Fed Chair, on Jul. 29. The main tool the Fed uses to rein in inflation is rate hikes.

The Fed doesn't directly set new fixed-rate mortgage rates. But the factors that influence its decisions (and to a lesser extent the decisions themselves) certainly do move those rates, usually in advance of Fed rate-change announcements.

Why bond markets act differently from stock markets

Mortgage rates are largely dictated by the yields on a type of bond, the mortgage-backed security (MBS). So, we focus on bond markets.

On May 7, The New York Times explored why stock markets and bond markets have been behaving so differently from each other since the start of the conflict in the Middle East.

Investors in stocks have been wagering that U.S. companies will continue to generate large profits during the conflict. And the stock market typically cares only about whether dividends and company values will continue to rise.

"But the bond market is another matter," said The Times. "Bond traders have maintained a much sharper focus on risk. Yields remain correlated with shifts in the price of oil. As oil prices have spiked and inflation has risen, yields have risen and bond prices, which move in the opposite direction, have fallen."

Comerica Bank's outlook for this week

On Monday, Comerica Bank published its weekly outlook:

"CPI and PPI inflation are both forecast to be slightly cooler in July, helped by stable petroleum product prices. Core CPI also likely improved on benign shelter inflation. If these data come in as expected, they will bolster the case for the Fed to refrain from hiking at their next decision on September 16. Either way, the July inflation reports will have more bearing on the next Fed decision than the month’s jobs report. The August jobs data and CPI report will come out before the Fed meets, so the July reports are not the final word.

"Retail sales are forecast to have risen modestly in July, held back by lower spending at gas stations and new vehicle sales. Core sales were likely stronger. Consumer sentiment is expected to hold about flat in the early August release."

Comerica's forecasts are sometimes different from published market expectations, which are drawn from a broader pool of analysts' consensus forecasts.

Mortgage rates today

There are two economic reports on today's MarketWatch economic calendar. July's PPI is by far the more important.

It works like the CPI but measures price changes earlier in the supply chain: at factory gates, in wholesalers' and retailers' warehouses, and the equivalents of those for services.

Like all price indices, the PPI comprises four headline numbers, but MarketWatch publishes only two for this type of report. They measure price changes during the reporting month (July).

One is the straight PPI, reporting on all the prices covered by the survey. "Core" PPI covers the same except it excludes food and energy prices.

Markets are expecting the following from those two headline figures:

• July PPI — Markets expect all producer prices to have risen by 0.2%, compared with June when they fell by 0.3%
• July core PPI — Markets expect core prices to have risen by 0.3%, compared with a 0.2% increase in June

Typically, mortgage rates rise when inflation figures are higher than expected and fall when they're lower. On-forecast figures often leave those rates unchanged — though not yesterday.

Today's other report covers new jobless claims during the week ending Aug. 8. Markets expect to see 204,000 initial claims for unemployment benefits that week, up from 199,000 the week before.

What's next?

Tomorrow's retail sales figures for July and the preliminary consumer sentiment index for August might affect mortgage rates.