Geopolitical tensions in Iran drive energy prices higher, delaying Fed rate cuts and lifting 30-year mortgage rates to 6.46%.
US 30-year fixed mortgage rates climbed to 6.46%, up from 6.32% a month ago, as Iran-related disruptions tighten energy supplies. Gasoline and diesel price increases feed broader inflation, prompting the Federal Reserve to hold rates steady at 3.50%-3.75%.
Three months ago, markets expected two additional Fed rate cuts this year, but persistent inflation pressures have delayed easing. The Cato Institute noted the Iran conflict marks the fourth supply shock in five years, with the Fed consistently opting for caution over immediate action.
Higher energy costs ripple through the economy, as truckers and businesses pass expenses to consumers. Analysts warn the Fed may raise rates further if CPI approaches 5%, keeping borrowing costs elevated.