Mortgage Rates Today, June 12, 2026: The Middle East Again Controls Rates

The bigger picture

Yesterday morning, mortgage rates looked likely to climb. First, the producer price index, an inflation predictor, came in hotter than hoped. Then, the U.S. looked likely to significantly escalate the conflict in the Middle East.

What happened to turn things around, leaving mortgage rates unchanged yesterday? "President Donald Trump said Thursday that he had canceled scheduled attacks on Iran after progress on a potential peace deal," reported The Washington Post. "Trump asserted that an agreement to end hostilities would be signed 'maybe this weekend.'"

Shifting optimism and pessimism over the prospects of an early peace deal with Iran and the opening of the Strait of Hormuz have been the main drivers of changes in oil prices and mortgage rates for weeks now. And they may be today, although there's some chance that this morning's consumer sentiment survey might affect those rates, too.

Scroll on down for details of 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 Fed

April's price indices (the CPI, PPI, IPI and PCE) tend to lend weight to pessimistic arguments about future inflation rates. May's consumer price index and producer price index were even worse than April's.

Those reports 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:

"Headline CPI is expected to top 4% year-over-year in the May release, reaching a three-year high on last month’s rise in gasoline prices. Core CPI should run cooler, near 3% year-over-year. Prices rose faster than average hourly earnings in May, eroding consumers’ purchasing power. The PPI likewise registered another outsize increase and outpaced the CPI, reflecting the larger shares of petroleum products, metals, and shipping costs in the producer price basket.

"Consumer inflation expectations are likely to tick higher in the New York Fed’s May survey, weighing on views of the economy and job market. But the University of Michigan’s more timely read on consumer sentiment for early June will likely edge up from May’s record low, helped by lower gasoline prices over the last two weeks and higher stock prices."

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

Mortgage rates today

There is only one economic report on today's MarketWatch economic calendar. It's an initial reading of the consumer sentiment index for June from the University of Michigan. This report is a "flash," meaning it might be revised later in the month as more data are collected.

Comerica Bank thinks the index will come in a little better than May's record low (see above). However, market expectations differ.

Markets expect this morning's report to set another new all-time low, coming in at 46, compared with May's 48.2.

Typically, worse-than-expected numbers in a report are better for mortgage rates, while better-than-expected ones tend to push those rates higher, all other things being equal. When numbers come in as expected, mortgage rates rarely move far.

Next week's star report reveals retail sales in May and is scheduled for Wednesday.