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What Moves Mortgage Rates?
The four forces that set your rate, and how to read them. Updated 2026-07-09.
1. Mortgage-backed securities set the rate
Your mortgage rate is set by the price investors pay for mortgage-backed securities (MBS). Lenders sell loans into MBS pools, so when MBS prices rise, lenders can offer lower rates, and when MBS sell off, rates rise. This is the most direct driver, and it moves intraday. See MBS today.
2. The 10-Year Treasury is the proxy
MBS trade at a spread over the 10-Year Treasury, so the 10-Year is the best real-time signal for where rates are heading. See the 10-Year today.
3. Inflation and the economic calendar
Inflation is the enemy of low rates. Hot CPI or PPI prints push yields and mortgage rates up; soft prints pull them down. The jobs report and Fed decisions matter for the same reason. See the calendar.
4. The Federal Reserve sets the backdrop
The Fed does not set mortgage rates directly, but its policy path shapes inflation expectations and the whole yield curve, which is what MBS and the 10-Year price off. Put together, today's picture is:
Rates trending up (10-Y +6bps over 5 days). Lock to stop the bleeding.
Frequently asked questions
Does the Federal Reserve set mortgage rates?
No. The Fed sets the short-term federal funds rate. Mortgage rates are set off mortgage-backed securities and the 10-Year Treasury, which respond to inflation and the Fed's expected path, not the funds rate directly.
What is the single best indicator to watch?
Mortgage-backed securities intraday, with the 10-Year Treasury as the fast proxy. Both are on this site and update through the day.
Why did my rate change when the Fed did not meet?
Because rates move with MBS and the 10-Year every day, driven by inflation data and market expectations, not only by Fed meetings.
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