I Told Every Client Under Contract to Lock. Here’s the Number That Decided It

Mortgage rates today are under pressure after Brent crude broke $90 a barrel, and the Federal Reserve just put a rate HIKE back on the table. Here is what moved, what it costs, and what I am telling my clients to do about it.

Updated for Monday, August 31, 2026 — Mortgage bonds opened down 15 on oil and Middle East conflict, pushing mortgage rates toward 6.85% and possibly 7%. PCE inflation sits at 3.7% against the Federal Reserve's 2% target, with 54% of the basket running over 3% versus 32% before the pandemic. Inflation has now been above target for 64 straight months. Meanwhile 23,000 jobs were lost in July and May–June revisions erased another 103,000 — and the Fed said plainly it is focused on inflation, not jobs.

Here is the part almost nobody explains to homebuyers: the Federal Reserve can raise rates and your mortgage rate can still go down. The Fed sets short-term interbank lending. Mortgage rates track the 10-Year Treasury. If bond investors believe a hike will actually control inflation, long-term yields can fall even while the funds rate rises. That mechanism is walked through at 06:40.

What I am telling clients: if you are under contract, lock your mortgage rate. I cannot price around another drone strike. If you are not under contract yet, watch two things — oil and inflation. Oil back under $70 and holding is when the Federal Reserve gets room to cut and mortgage rates can finally come down. Oil at $120 is a very different conversation for the housing market.

CHAPTERS
00:00 Oil Just Broke $90 — Here's Why That Hits Your Rate
00:39 The Chart I Check Every Morning Before Quoting a Rate
01:21 What the Federal Reserve Actually Watches
01:46 Inflation at 3.7% When the Target Is 2%
01:59 The Data This Week That Can Move Mortgage Rates
02:40 103,000 Jobs Gone — And the Fed Says It Doesn't Care
04:06 The Jackson Hole Speech, Translated
06:20 The Odds of a Hike Just Changed
06:40 Why a Fed Hike Doesn't Have to Raise Your Mortgage Rate
08:31 Lock or Float: What I'm Telling Clients Right Now
10:04 Rate Watch, Loan Estimate Review and DIY Mortgage
11:16 What to Watch Next

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Welcome to The Rate Update with Dan Frio — mortgage rates, housing market data, and straight answers for homebuyers, homeowners and Realtors, from a licensed mortgage loan officer with 38 years in the business.
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Dan Frio | NMLS #246527 | TRU Mortgage Team / PBT Bancorp | NMLS #257781 | Equal Housing Lender
524 Main St, Hazard, KY 41701
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This channel is for education and commentary only. All opinions are my own and do not represent PBT Bancorp, TRU Mortgage Team, or any financial institution I may be employed by or affiliated with. Nothing here is an offer to lend, a commitment to lend, or financial, legal, tax, or investment advice. Mortgage rates, terms, approvals and programs are subject to borrower qualifications, market conditions, underwriting approval, and change without notice. Not all borrowers will qualify.