Mortgage Rates Today, June 4, 2026: Rates Higher on Escalating Middle Eastern Tensions. But Hope Is Here

The bigger picture

For more than three months, mortgage rates have been almost exclusively driven by events surrounding the Middle East conflict. Hopes of an early peace deal sent them lower, while escalating tensions pushed them higher.

They rose yesterday as peace talks appeared to stall and tit-for-tat attacks were carried out by both sides. However, something extraordinary happened last evening on Capitol Hill that might see mortgage rates today fall.

"The House on Wednesday voted to direct President Trump to withdraw U.S. forces from Iran or win approval from Congress to continue the war, after four Republicans sided with Democrats in a striking sign of growing opposition to a military campaign now in its fourth month," reported The New York Times.

It's unclear whether Congress can enforce its will, even if the Senate backs the House resolution. And we can't be sure how markets will react to the after-hours news. Still, anything that might hasten an end to the conflict and the early normalization of oil and other supply chains would normally help mortgage rates fall.

Scroll on down for details of today's economic report and how it might affect mortgage rates.

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.

SIFMA warned in an e-newsletter on May 29: "Treasury yields [which mortgage rates typically track] could continue to rise even if the Iran war ends, as the primary driver of the recent increase in yields has been real yields, not inflation expectations. While oil prices and Treasury yields have moved in tandem recently, the correlation is weakening, and investors should focus on other factors, such as the Federal Reserve's actions and government debt issuance."

You might have noticed worrying reports in the financial press about the likelihood of inflation getting worse. For example, in an e-newsletter on May 10, The Economist wrote, "The Iran war is already causing pain for American motorists, who are paying more than $4.50 a gallon for petrol. Now Americans face a grocery-price shock."

On May 11, MarketWatch had similar concerns: "The surge in gasoline prices tied to the Iran war is set to drive U.S. inflation to a three-year high — and it might get worse before it gets better.

" ... That’s not the only downside of higher inflation," the report continued. "The increase in prices has handcuffed the Federal Reserve. The central bank is likely to be stymied from cutting interest rates aggressively, leaving the cost of borrowing painfully high for prospective home buyers and anyone who needs a big loan."

The Fed

April's price indices (the CPI, PPI, IPI and PCE) tend to lend weight to these pessimistic arguments. And they landed well after the last meeting of the Federal Reserve's rate-setting committee. Minutes of that meeting were published on May 20 and included the following:

"Almost all participants noted that there was a risk that the conflict in the Middle East could persist for an extended period or that, even after the conflict ended, the prices of oil and other commodities could remain elevated for longer than expected. In such scenarios, these participants expected continued upward pressure on inflation arising from supply chain disruptions, high energy prices, or the pass-through of higher input costs to other prices. The vast majority of participants noted an increased risk that inflation would take longer to return to the Committee’s 2 percent objective than they had previously expected."

Bottom line: "A majority of participants highlighted ... that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent." Policy firming is Fedspeak for a rate hike.

Bond markets vs. stock markets

Mortgage rates are largely dictated by 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 weekly preview

On Monday, Comerica Bank published its weekly preview:

"Payrolls will likely rise modestly in the May jobs report [due Friday], but still outpace labor supply growth. An aging workforce and immigration restrictions mean fewer workers are entering the labor force. The unemployment rate is expected to hold steady. Average hourly earnings likely rose modestly and slowed on a year-over-year basis. The lagged release of the April Job Openings and Labor Turnover Survey [JOLTS, due today] is expected to show higher openings, with layoffs and quits rates holding steady. The ISM manufacturing [Monday] and services [due Wednesday] PMIs are both forecast to edge up in May’s releases. The surveys are also likely to show intensifying margin pressure as higher petroleum prices lift input costs.

"The Fed’s Beige Book [due Wednesday] will likely highlight a widening gap between spending by affluent households and middle- and lower-income households — The K-shaped economy — as higher energy prices squeeze the cost of living."

Comerica's predictions often differ from market expectations, which are a consensus of a wider pool of analysts' forecasts.

Mortgage rates today

There is only one economic report on today's MarketWatch economic calendar. But we don't hold out much hope of it affecting mortgage rates for the better or worse.

It will reveal the number of new claims for unemployment benefits during the week ending May 30. And markets expect those to come in at 230,000, unchanged from the previous week.

Mortgage rates tend to fall when a report's actual figures are worse for the economy than expected, and to rise when they're better. When numbers are on or close to forecasts, those rates rarely move in response to the data.

However, not only do markets tend to shrug off weekly figures as too volatile, but they'll also be busy processing yesterday evening's surprising House vote. So, don't stress out over today's data.

Stand by for the official monthly jobs report, due tomorrow. This is often the most influential of all economic reports. And it might even cut through the Middle East drama.