Good Tuesday AM from your Hometown Lender,

Today’s Market Analysis – Military action against Iran happened over the weekend, and although there was talk of traders looking for safe havens, bonds worsened because of increased oil prices and concerns of inflation. Yesterday saw rates move up about 0.125%, which after the stability we have seen in rates over the last few weeks, seems like a lot (but really isn’t). Both the 10-yr yield and mortgage bonds were steady through the day yesterday after the initial reaction in the morning, and oil prices were stable through the day.

It looked like things would hold steady heading into today (although that has proven not to be the case). Rates this morning are moving higher again, likely another 0.125%. Fears are growing of a lengthy disruption to energy markets and a surge in inflation as the fighting enters its fourth day with no signs of de-escalation.

President Trump has said that the strikes against Iran could continue for four to five weeks, which signals we may not see any rate sheet relief anytime soon, and not today. Rates are in danger of moving higher from here if oil prices continue to increase.

Market Analysis – From a higher and better view:

Quick Snapshot (Tuesday, March 3, 2026)

10-year Treasury: Last official “constant maturity” print was 3.97% (Feb 27), but yields have pushed ~13 bps higher since Friday on the Middle East energy shock → think ~4.10% neighborhood today.
Mortgage rates (reality check):
- MND daily 30Y fixed: 6.12% (Mar 2)
- Freddie weekly 30Y fixed: 5.98% (Feb 26)
Today’s dominant current event: U.S./Israel–Iran conflict widening + Strait of Hormuz disruption fears → oil up hard (Brent ~$83 area, after touching mid-$80s). That’s an inflation headline, not just a geopolitics headline.
Fed tone (today): NY Fed President John Williams said the economy is on “good footing,” inflation still above 2%, and policy is “well positioned,” with cuts eventually warranted if inflation tracks down.

1) Market Analysis – What Hit This Morning (CPI)

No CPI today. Next CPI is Feb 2026 CPI on Wednesday, March 11 (8:30am ET).
The market is trading “inflation by headline” anyway because the oil spike is immediate and visible (gas prices follow with a lag, expectations move fast).

Narrative you can use:
“Even without CPI on the calendar today, the bond market is trading inflation risk in real time because energy is repricing. That can push mortgage pricing around before any economic report even hits.”

2) Fed Watch

Williams (NY Fed) today: economy resilient; inflation progress has been uneven; policy is positioned to balance jobs and inflation; further reductions eventually make sense if inflation falls as expected.
Market pricing shifted more hawkish on the oil shock: Reuters notes markets pushed out the next Fed cut to September and are pricing only ~42 bps of cuts by December.
Fed speakers today: Williams + Schmid + Kashkari all on deck (so expect headline-driven volatility).
Next FOMC: March 17–18.

3) Market Analysis – Where Mortgage Rates Actually Are

Weekly “headline” benchmark: Freddie at 5.98% (but it’s averaged over the prior week and won’t capture intraday drama).
Daily street-level benchmark: MND’s daily index ticked up to 6.12% (Mar 2)—that’s the more responsive “what’s happening now” indicator.
Translation for borrowers/agents: in a week like this, rate sheets can reprice on oil + Treasury moves even before the next “official” report.

4) Market Analysis – Housing Market Check

With rates sitting around the low-6s, housing activity is still payment-sensitive: small rate swings matter at the margin, and volatility affects buyer confidence more than the absolute level. (This week is a confidence week, not a spreadsheet week.)

5) Market Analysis – Political Backdrop & Fed Independence (Current Events Emphasis)

Two big “policy uncertainty” tracks are hitting markets at the same time:

Geopolitics / energy shock: the conflict has widened and shipping/energy infrastructure risks are pushing oil sharply higher. This is the fastest way to reheat inflation expectations.
Tariff/legal uncertainty:
- Supreme Court struck down a major set of Trump tariffs imposed under an emergency law (IEEPA).
- Courts are now grappling with refund mechanics (Reuters cites the prospect of $130B+ in refunds).
- The administration also floated a new 15% temporary tariff under Section 122 (legally separate, less-tested).

Why this matters for rates: uncertainty raises risk premia; oil raises inflation risk; both can keep longer-term yields sticky.

6) What This All Means for Rates Going Forward (Three-Scenario Grid)

Scenario	Setup	Mortgage rate bias (next 1–4 weeks)
Base case (most likely)	Oil stays elevated but doesn’t spiral; data remains “okay”	Choppy low-6s, with fast reprices around headlines
Better-rate case	Conflict cools / oil gives back gains; growth data softens	Drift back toward upper-5s/low-6s
Worse-rate case	Oil shock persists + inflation expectations rise	Push toward mid-6s and “lock desks get stingy”

This is a working model anchored to today’s oil-driven inflation risk and the market’s pushback of Fed-cut timing.

7) Practical Takeaways

Agents: prep clients for volatility, not just rate level. “Your payment strategy matters more than today’s headline rate.”
Buyers: keep two structures ready (e.g., fixed + ARM or fixed + temp buydown) so you can act when pricing flashes green.
Sellers: concessions/credits can be the difference between “still looking” and “in escrow” when buyers get nervous.

8) Market Analysis – Lock vs Float

Close in ≤ 30 days: Lock bias. Oil + geopolitics + Fed speakers = “surprise reprice” risk.
Close 31–60 days: selective float is fine only with hard guardrails (trigger rate, trigger day, and a “no heroics” rule).
Watchlist this month: Jobs (Mar 6) and CPI (Mar 11) are the next big scheduled landmines.

Pray for our troops and all those being impacted in the Middle East.

Stay safe and make today great!