For the week of September 7, 2026 — Vol. 24, Issue 36

A Look Into the Markets

Interest rates ticked up to their highest levels of the year amidst rising rates around the globe. While the move here at home has certainly caught everyone’s attention, the bigger story is what is taking place overseas. Let’s break down what happened and look into the week ahead.

“I’m sure you have some cosmic rationale
Now here you are, in the ninth
Two men out and three men on.
Nowhere to look, but inside
Where we all respond to pressure” Pressure by Billy Joel

Rates Rising Around the World

The U.S. 10-year Note has climbed to its highest yield since last year, but as difficult as the move has been here, other global bond markets have fared far worse.

This helps put Treasury Secretary Scott Bessent’s comments into perspective when he said the U.S. bond market is outperforming the rest of the globe. Technically, he is correct. Interest rates in places like Japan and the UK have risen to levels not seen in decades.

Why are rates spiking? There are several forces at work. Some central banks around the globe are facing pressure to raise rates, including Japan. At the same time, the renewed spike in energy prices is adding another layer of inflation concern.

Labor Market Finding Balance

Here in the U.S., the labor market continues to normalize. There is now approximately one job opening for every unemployed person.

Think about what that means. There is essentially one available job for every person looking for work. People can still find jobs, but we no longer have the extreme imbalance where available jobs greatly outnumber available workers.

That points toward a labor market that has moved closer to balance. It doesn’t necessarily mean the labor market is weak. Rather, the extraordinary tightness we experienced previously has continued to unwind.

Iran, Oil & Inflation

Oil has climbed back above $90 per barrel as the conflict with Iran remains unresolved.

If oil remains at these levels, or moves higher, it could become a problem for sustained improvement in inflation. Higher energy costs don’t simply affect what consumers pay at the pump. Energy feeds into transportation, production and the broader cost of doing business.

For the bond market and the Federal Reserve, that’s important.

Bonds don’t like inflation, and the renewed energy spike has been one of the reasons the global bond market experienced some rough sledding this week. The longer oil remains elevated, the greater the concern that inflation could remain sticky.

4.75%

The 10-year Note moved above an important yield resistance level at 4.75%.

Once resistance is broken, there is the potential for a gravitational pull toward the next major level, and in this case, that’s 5.00%. The last time the 10-year was around 5% was in the fall of 2023, nearly three years ago.

There is some good news and it relates to the mortgage spread.

The spread between the 10-year Treasury and 30-year mortgage rates is currently around 200 basis points. Back in 2023, that mortgage spread was closer to 300 basis points. This is important for us today.

If the 10-year approaches 5% with today’s roughly 200 basis-point spread, 30-year mortgage rates would approach 7%. Compare that with 2023, when a roughly 300-basis-point spread helped push the 30-year mortgage rate toward 8%.

This spread has narrowed over the past few years due to a big decline in bond market volatility.

30-Year Mortgage Rates and 10-Year Note

30-Year Fixed Mortgage Rate (Freddie Mac daily average, September 3, 2026)

• Rate: ~6.71% (current average 30-year fixed rate)
• Change from Previous Week: up from ~6.66% (week ended August 27, 2026)
• Change Year-over-Year: up from ~6.50% on September 4, 2025 (Freddie Mac)

10-Year Treasury Note Yield (daily close, September 3, 2026)

• Yield: ~4.74%
• Change from Previous Week: up from ~4.67% (week ended August 27, 2026)
• Change Year-over-Year: up from ~4.21% on September 3, 2025

Chart: Fannie Mae 30-Year 5.5% Coupon (Friday, September 4, 2026)

Each candle represents one day of trading. As mortgage bonds prices move higher, rates move lower. In last week’s issue we talked about the pending breakout that was to happen and it did; prices broke to the downside. Let’s see if mortgage bonds can find their footing in this important news week.

Looking Ahead

Markets will be closed Monday in observance of Labor Day, giving us a shortened but jammed packed trading week.

Inflation will take center stage with both CPI and PPI on tap. These reports could be big market movers, particularly after Mr. Kevin Warsh indicated that the Fed is more focused on inflation.

We’ll also have multiple Treasury auctions, including longer-duration supply in 10-year Notes and 30-year Bonds. With yields already elevated, demand for this new supply will be something to watch closely.

One thing we won’t hear is a lot of Fed chatter. Federal Reserve officials have entered their blackout or quiet period ahead of the next Fed meeting on September 16. That means the incoming economic data will largely have to speak for itself.

Finally, we’ll be watching for Treasury Secretary Scott Bessent’s Treasury buyback program, expected to begin September 8. This bond buying is only a drop in the bucket for what is an enormous bond market, so we do not know how rates will react once this begins.

Between inflation, Treasury supply, oil prices and a global bond market under pressure, there will be plenty for the markets to digest.

Economic Calendar for the Week of September 7th – 11th

The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.