Mortgage Rates Today, September 8, 2026: Calm Before the Storm for Rates?

The bigger picture

Mortgage rates rose only modestly on Friday, despite the jobs report showing three times as many new jobs in August as markets were expecting. Meanwhile, both rhetoric and military action ratcheted up in the Middle East over the extended weekend.

"Oil prices climbed in volatile trading Monday after reports of Saudi Aramco infrastructure being hit by Houthi rebels in Saudi Arabia close to the Yemen border," reported MarketWatch yesterday afternoon. At one point that morning, CNBC said that oil prices had hit a six-week high. None of this bodes well for mortgage rates today.

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.

On 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.

On Sep. 3, Fed Governor Christopher Waller said he would support holding interest rates steady if August inflation data supports it, according to The Wall Street Journal. That turned the tool's reading into a toss-up.

Friday's jobs report increased the odds again. And the FedWatch tool yesterday said there's a 59.3% chance of a rate hike following the next FOMC meeting, up from 58.4% on Friday — but way higher than its 44.4% reading a month ago.

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 Aug. 31, and followed up with bigger attacks the following afternoon. Iran retaliated against both waves.

Over the Labor Day weekend, both sides escalated tensions, sending oil prices higher yesterday.

Peace talks with Iran and mediators had already stalled before recent escalations, 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.

"An average of 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, the lowest since ​May, according to shipping data on Monday, after U.S. and Iranian ‌strikes on tankers," reported Reuters on Sep. 7. "The 10-day moving average was 10 on Sunday, down from more than 15 on Friday and nearly 13 on Saturday, data from analytics firm Kpler found." Before the war began, such traffic averaged more than 100 ships daily.

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 286,684 million barrels for the week ending Aug. 28, 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 yesterday and last week. Why buy crude oil when you can't refine it?

Unfortunately, that has so far translated into gas prices that are appreciably higher than a month ago, alongside record-high diesel prices. 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.

Mortgage rates today

There are two economic reports on today's MarketWatch economic calendar. They are the small business optimism index for August from the National Federation of Independent Business and July's consumer credit data.

Neither typically affects mortgage rates much. Indeed, MarketWatch has published no market expectations for either.

So, we suspect, movements in mortgage rates today are more likely to be driven by events in the Middle East and any hangover from Friday's jobs report than today's data.

What's next?

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

Nothing is on tomorrow's economic calendar.