Mortgage Rates Today, June 18, 2026: Rates at Risk from Yesterday's Fed Events and Concerns About Middle East Deal

The bigger picture

Mortgage rates again inched lower yesterday, according to ICB. However, Mortgage News Daily reported an appreciable increase by recent standards, and we fear other rate monitors may play catch-up today.

There are certainly grounds. "The Fed held its benchmark rate steady, in a range of 3.5% to 3.75%, in a unanimous vote," said The Wall Street Journal yesterday afternoon. "But officials’ quarterly economic projections told the story of the shift: Nine of 19 officials penciled in at least one rate increase by year’s end, up from none in March. Just one foresaw a cut, down from 12."

Meanwhile, also yesterday afternoon, a U.S. official read to reporters the memorandum of understanding agreed by the United States and Iran on Sunday. And it contains provisions that some Republican lawmakers have said they find unacceptable.

"President Donald Trump is framing a tentative peace deal with Iran as a victory for the U.S., but fractures in the Republican Party suggest that it could be a hard sell both on Capitol Hill and in the run-up to November’s midterm elections," said NBC News yesterday.

Markets hate the sorts of political fractures the deal might provoke because they create uncertainty. And that might add upward pressure to mortgage rates, especially if opposition within the president's own party is vocal.

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, published on Jun. 10 and 11, respectively, were even worse than April's. Meanwhile, May's import price index, released Jun. 16, came in worse than markets were expecting.

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.

We should get the minutes of the Jun. 17 meeting roughly three weeks from that date. But events surrounding that showed committee members all but ruling out a further cut to general interest rates this year. And almost half of them now expect a hike in 2026.

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:

"The Federal Reserve is expected to hold the federal funds target steady at a range of 3.50% to 3.75% at their June 17 decision, incoming Chair Kevin Warsh’s first. Their policy statement will welcome the pickup in job growth so far this year — Payrolls averaged a gain of over 100,000 per month through May, up from 10,000 per month in 2025. The statement also will acknowledge that inflation has risen further from their 2% target due to energy prices. On core inflation, they will likely be encouraged by cool core goods prices in recent reports, but concerned by the pickup of services price inflation excluding housing. In the June Dot Plot, the median forecast for inflation at year-end will likely rise, while the unemployment rate estimate should edge lower. On rates, a few more Dots on the Plot are likely to indicate members see a hike as likelier than a cut by the end of 2027. Even so, the June meeting’s core message will likely be that the Fed expects to hold rates steady at the next few decisions.

"The first activity indicators for May are expected to be mixed. Industrial production likely rose solidly on higher manufacturing and mining output. Retail sales growth is expected to be moderate, with higher spending on new cars and gasoline but cool growth in other categories. Housing data are likely to be mixed. Starts and building permits are expected to hold on trend and point to subdued building this summer. Homebuilder sentiment is expected to improve, though, good news for the outlook. The pending home sales index should point to further modest gains for existing home sales ahead, too."

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 are again three economic reports on today's MarketWatch economic calendar. But none of them typically affects mortgage rates noticeably.

Here are what markets are expecting from each of this morning's three reports:

• New jobless claims during the week ending Jun. 13 — Markets expect these to number 225,000, slightly fewer than the previous week's 229,000
• June Philadelphia Fed business outlook survey — Markets expect this to improve considerably to a 9.8 reading, compared with -0.4 in May
• May leading indicators — Markets expect these to hold steady at 0.1%

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.

What's next?

There are no economic reports scheduled for tomorrow, and bond markets will be closed for the Juneteenth holiday. So, we'll be back on Monday.