Mortgage Rates Today, March 17, 2026: Rates Inch Lower But the Coalition of the Unwilling Might Pose Risks

The bigger picture

Mortgage rates fell modestly yesterday in line with declining oil prices. The movements were due to rekindled hopes that the Strait of Hormuz might soon reopen, allowing the free movement of oil again.

However, allies responded badly to the U.S. "demanding" their help. "Germany has rejected taking part, while Japan and Australia have indicated they are unlikely to send vessels to help," reported The Wall Street Journal yesterday afternoon. "Britain and France said they are assessing possible action but haven’t committed to doing anything before fighting halts," it continued.

Senior officials say the U.S. Navy is more than capable of opening the strait itself. But we'll have to see how markets react today to the idea of American blood and treasure being solely put on the line.

Stand by for tomorrow's Federal Reserve announcement and news conference concerning interest rates. That will bring a summary of economic projections, which includes the famous "dot plot."

Scroll on down for information about the Fed meeting and dot plot, along with today's economic report, including their possible impacts on 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.

Fed meeting

Every six weeks or so, the Fed meets to decide whether general interest rates should change. The body that makes those decisions is the Federal Open Market Committee or FOMC, and the next meeting is due to conclude tomorrow.

Its job is to maintain prosperity (mostly measured through the labor market) while keeping inflation in check. That's not always an easy line to tread.

On March 6, markets were shocked by the weakness of the jobs report, which showed the economy shedding 92,000 jobs in February and the unemployment rate inching higher.

Meanwhile, last Friday's PCE price index, the Fed's preferred gauge of inflation, revealed that underlying ("core") inflation was running at 3.1% year over year in January. The FOMC's target inflation rate is an annual 2%.

The Fed is typically more spooked by inflation than employment, and markets are expecting it to hold general interest rates steady at its meeting tomorrow. Indeed, the CME FedWatch tool last night put the odds of a no-change announcement at 99.1%.

Dot plot

At alternate FOMC meetings, the members release a summary of economic projections, which includes the famous dot plot.

Encyclopedia Britannica says, "The Fed dot plot is a chart that shows you where each FOMC member thinks interest rates will be by the end of the current year, two or three (depending on the time of year) consecutive years after, and the more ambiguous 'longer run.' Each 'dot' represents a member’s individual view."

Markets typically take dot plots extremely seriously. And they may take special notice this time because it will show how the Fed views the likely impact of the Iran war on U.S. inflation and the economy.

If the dot plot shows FOMC members anticipating more cuts to general interest rates this year and next than markets are hoping for, that could exert downward pressure on mortgage rates. However, if fewer-than-expected cuts are on the dot plot, that could be bad for mortgage rates.

The FOMC directly affects most variable-rate borrowing. However, it only indirectly influences fixed-rate mortgage costs.

Fed chair's news conference

At 2:30 p.m. Eastern on Wednesday, 30 minutes after the rate announcement and dot plot release, Fed Chair Jerome Powell will hold a news conference. Powell is scheduled to retire from the chair in May, so some investors may see him as a lame duck.

However, others will probably listen to him very carefully as a widely respected economic commentator who is delivering the FOMC's new insights.

Comerica Bank's Preview of the Week Ahead

On Monday, Comerica Bank published its regular e-newsletter, laying out its predictions for the week:

"The Fed will hold rates steady at Wednesday’s meeting and signal vigilance toward inflation rising due to the Iran war. Ordinarily, central bankers try to look through the impact of an inflationary shock to energy prices and other events disconnected from the business cycle, since inflation usually returns to trend once shocks subside. But this shock follows half a decade of inflation overshooting the Fed’s target, so they will be attuned to the risk that consumers’ and businesses’ inflation expectations follow prices at the pump higher. The March dot plot will likely raise the forecast for inflation and signal that the median member of the Federal Open Market Committee expects to hold rates steady through the end of 2026.

"Industrial production likely grew slower in February after January’s cold weather boosted utilities output. Manufacturing growth was likely moderate and capacity utilization is forecast to hold steady. Producer Price Index inflation likely held steady in February. It will rise in March on the surge in prices of diesel, gasoline, and other petroleum products after the outbreak of the war."

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

Mortgage rates today

There is only one economic report on today's MarketWatch economic calendar. And it rarely affects mortgage rates.

It's February's count of pending home sales. And they're expected to fall by -1.0%, a little worse than January's -0.8%.

Mortgage rates typically rise when important reports deliver better-than-expected economic news, and fall when that news is worse than expected. Outcomes close to expectations tend not to affect mortgage rates.

Today's report will likely need to bring shocking news to move mortgage rates far.