Mortgage Rates Today, May 20, 2026: Fed Minutes Due Today

The bigger picture

Mortgage rates climbed sharply yet again yesterday. It was the second appreciable rise in less than a week.

Those who know about the strong (but not invariable) correlation between mortgage rates and the yield on 10-year Treasury notes won't have been surprised. "Yields on U.S. Treasurys are continuing their ascent today, after climbing to multiyear highs over the past days," said The Wall Street Journal yesterday afternoon.

That morning, the Journal pinpointed markets' dual issues: "The Treasury selloff picks up steam, sending yields higher, as markets fret about the impact of rising energy costs on inflation while the debt of rich nations grows larger."

And it suggested things could get even worse for Treasurys – and by implication, mortgage rates. The Journal reported that nearly two in three investors reckon the 30-year U.S. Treasury yield could top 6% in the next 12 months, according to Bank of America’s global fund manager survey.

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.

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."

Last week's price indices (the CPI, PPI and IPI ) tend to add weight to these pessimistic arguments. And, with inflation rates already so high, Kevin Walsh, who was confirmed last Wednesday as the new chair of the Federal Reserve, may struggle to deliver the lower general interest rates for which he was nominated.

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 minutes of the Fed’s April meeting are unlikely to surprise markets: With the Iran War pushing up inflation but also clouding the growth outlook, FOMC members mostly agree they should hold rates steady near-term. Their guidance may be more circumspect than usual out of courtesy to incoming Chair Warsh, who will want to make a mark on the Fed’s communication at upcoming meetings even if he doesn’t try to change rates. In any case, the war and energy prices will influence the rate outlook more than the Fed leaders’ baton pass.

"The University of Michigan’s Consumer Sentiment Index will likely be revised a bit higher in the final May release, but remain the lowest in the survey’s nearly 50-year history. Consumer inflation expectations likely held near April’s elevated levels. AAA reports the national average gas price reached another four-year high in early May."

Comerica also thought that this week's housing data would probably soften, compared with March.

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

Mortgage rates today

There are no economic reports on today's MarketWatch economic calendar. It covers pending home sales in April, and markets expect those to grow by 1% that month, compared with 1.5% in March.

We'd normally make a fuss about the minutes, scheduled for release this afternoon, of the last meeting of the Federal Reserve's rate-setting committee. These publications can be influential.

However, we'll be surprised if these minutes are. Inflation is currently too overheated for the Fed to cut general interest rates anytime soon, and some on Wall Street are now wondering whether a hike is going to be the next change in rates. So, what can the minutes reveal that we don't already know?