Mortgage Rates Today, September 4, 2026: It's Jobs Report Day!

The bigger picture

Mortgage rates fell moderately yesterday. And they might drop again today, but probably only if this morning's jobs report comes in noticeably worse than expected.

Jobs reports are potentially highly consequential for mortgage rates and often move mortgage rates further than other economic reports, although only when they're much better or worse than experts' (aka analysts') consensus forecasts. Given that those experts are frequently laughably bad at predicting this type of employment data, the link between these reports and volatility is not all that surprising.

Scroll on down for much more on the forces affecting mortgage rates today, including this morning's economic reports.

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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

The Federal Reserve's rate-setting body (the Federal Open Market Committee or FOMC) left general interest rates unchanged on Jul. 29, as many expected. However, most specialist investors now think a hike is likely at the next FOMC meeting on Sep. 16, according to the CME FedWatch tool.

Last Friday, Aug. 28, the recently appointed Fed Chair Kevin Warsh delivered a speech at the Fed's annual Jackson Hole Economic Policy Symposium in Wyoming. And it was his remarks then that swung the FedWatch tool's majority behind a hike. Yesterday, Fed Governor Christopher Waller said he would support holding interest rates steady if August inflation data supports it, according to The Wall Street Journal.

And Waller's speech swung the FedWatch tool back to a toss-up. It now says there's a 50.2% chance of one following the next FOMC meeting, down from 62.3% on Wednesday and 66.9% on Tuesday evening — but way up on its 32.8% reading a month ago.

Warsh acknowledged that the Fed still had a way to go before the current inflation rate (3.7% annually, according to July's PCE price index) gets close to the central bank's long-term goal of 2%. In some ways, he was merely stating the obvious: most economists expect the inflation rate to have climbed again in August because gas prices resumed their upward trend that month.

But hearing it directly from Warsh, who had only recently been appointed by a president hoping for lower interest rates, was sobering for investors.

Assuming that the war in Iran doesn't end quickly, we think a small hike remains a sensible expectation for Sep. 16. A prolonged partial closing of the Strait of Hormuz is likely to fuel inflation. And the main tool the Fed uses to rein in inflation is rate hikes.

The FOMC doesn't directly set new fixed-rate mortgage rates. But the factors that influence its decisions (and to a lesser extent the decisions themselves) certainly do move those rates, usually in advance of Fed rate-change announcements.

The war and mortgage rates

For the first time in a month, the U.S. mounted airstrikes on Iranian military targets in the small hours of Monday morning, and followed up with bigger attacks on Tuesday afternoon. Iran retaliated against both waves. We've seen a pause since then, which has allowed changes in oil prices and mortgage rates to moderate.

Peace talks with Iran and mediators had already stalled before this week's escalation, and President Donald Trump had adopted a new strategy of economic warfare on Tehran. "Treasury Secretary Scott Bessent said the U.S. is launching a new campaign to isolate the Iranian regime, warning that countries and companies that do business with Tehran will face the wrath of the Trump administration," The Wall Street Journal reported on Aug. 24. Some think that initiative has turned out to be a damp squib.

Iran is certainly in a weak position economically, and waiting for it to buckle may have been a smart way to resolve the conflict. However, markets remain anxious for a rapid reopening of the Strait of Hormuz.

Hopes for progress on peace talks were dulled on Aug. 27, according to PBS: "No negotiations are happening right now, and this will continue until the president feels that maybe they [Iranian officials] come to the table in a meaningful way," White House press secretary Karoline Leavitt told "Fox & Friends" on Thursday.

The war, oil prices, inflation and markets

Mortgage rates respond to war news because a prolonged closure (or partial closure) of the Strait of Hormuz could again choke off 20% of the world's oil supply, putting additional pressure on gas, diesel, fertilizer and many other prices. It would take years to build the infrastructure necessary to bypass the Strait completely.

The Strait of Hormuz Live Traffic & Oil Crisis Tracker reckons shipping traffic through the Strait was 3.5% of its normal, pre-war level last week. We're unsure of that website's credentials and credibility, but Fox News reported on Saturday, "Traffic in the Strait of Hormuz remains at levels below the beginning of the war."

Strategic petroleum reserves in the U.S. and elsewhere globally are now at multi-decade lows, meaning there's less room to cushion consumers from rising gas prices. It may not feel like it, but this method of suppressing pump prices has been in place almost since the start of the conflict. And some observers worry that it will grow increasingly difficult to access remaining inventory for technical extraction reasons.

The U.S. Energy Information Administration says strategic petroleum reserve crude inventories fell to 289,726 million barrels for the week ending Aug. 21, marking the lowest level since 1983. The reserve stood at 415,064 million barrels before the Iran conflict began.

Meanwhile, many oil refineries in the Middle East and Russia are out of commission due to damage from the separate wars involving Iran and Ukraine. That began by sending oil prices lower on most days — though less so recently, including appreciable rises earlier this week. Why buy crude oil when you can't refine it?

Unfortunately, that has so far translated into gas prices that are moderately higher than a month ago, alongside significantly higher diesel prices (now only 3 cents short of their all-time high set in 2022). That's because a lack of refining capacity exacerbates rather than moderates supply issues for consumers and businesses, while demand remains fairly steady.

In his Substack post on Aug. 13, Nobel-prize-winning economist Paul Krugman backed up what we've been saying for some weeks. He referred to the "crack spread," which is the difference between the price of a barrel of crude oil and that for a barrel of "cracked" (aka refined) oil products, which he said had exploded by about $35 since the start of the Iran conflict.

"So while the price of a barrel of crude is up around $25, the price of the products refined from that barrel is up about 25+35=60 dollars per barrel," wrote Krugman.

Why? "The shortage of refining capacity has, in turn, held crude prices down: Buyers aren’t willing to pay extremely high prices for crude oil they can’t refine," continued Krugman. "Or to put it a different but equivalent way, the cutoff of oil shipments through the Strait of Hormuz in effect required a large rise in global oil prices to ration demand, but much of that rationing has taken place through a rise in the crack spread rather than a rise in crude oil prices."

Of course, any sudden good news from the Middle East could still send mortgage rates tumbling, regardless of that day's economic reports. Unfortunately, sudden bad news could — as we've seen in recent days — send them higher.

Why bond markets act differently from stock markets

Mortgage rates are largely dictated by the 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."

More recently, bond yields (and mortgage rates) have risen on concerns about the level of government debt, too.

Comerica Bank's outlook for this week

On Monday, Comerica Bank published its weekly outlook:

"Payrolls likely fell for a second consecutive month in August. The government ended Temporary Protected Status for over 300,000 Haitians on July 27, also canceling their work authorization; 100,000 to 200,000 had been in the labor force. The unemployment rate probably held steady despite lower payrolls because the workers who lost authorization and could no longer seek work would have left the labor force. As a result, the labor force likely contracted again in August after falling 1.3 million over the 12 months through July.

"The ISM Manufacturing and Services Purchasing Managers' Indexes will likely signal continued solid growth in August, [a] reason that a weak payroll report shouldn’t be viewed as a turn in the economic cycle. Both surveys are likely to report continued high inflation of input costs as the Iran War raises prices for oil, energy products, and petrochemicals, while the AI boom makes semiconductors and electronics more expensive. The surveys are likely to report that a majority of employers added to payrolls in the month, since TPS-related [temporary protected status-related] reductions in headcount were probably concentrated in specific industries and regions."

Comerica's forecasts are sometimes different from published market expectations, which are drawn from a broader pool of analysts' consensus forecasts.

Mortgage rates today

There is only one economic report on today's MarketWatch economic calendar. But it's August's jobs report (aka the employment situation report), which may be the most significant of all this month's reports, depending on how next week's consumer price index (CPI) and later inflation data turn out.

Jobs reports have four major components. Here is what markets are expecting from those today:

• August nonfarm payrolls — Markets expect 53,000 new jobs to have been created that month, much better than July when 23,000 jobs were destroyed
• August unemployment rate — Markets expect the August rate to hold steady at July's 4.1%
• August average hourly earnings — Markets expect earnings to have risen by 0.3%, better than July's 0.1%
• Year-over-year (YOY) average hourly earnings — Markets expect earnings to have risen by 3% between Sep. 1, 2025 and Aug. 31, 2026, slightly slower than the 3.1% YOY increase reported in July

Typically, mortgage rates rise when economic data are better than expected and fall when they're worse. On-forecast figures often leave those rates unchanged.

What's next?

Bond markets will be closed on Monday for the Labor Day holiday. That means mortgage rates shouldn't move that day.

The consumer price index (CPI) for August is next week's star report and is due that Friday.

We, too, will take a holiday on Monday, and this daily report will be back on Tuesday.