With October CPI coming in hot this morning, the question everyone is asking is simple: what actually moves mortgage rates? We ran the correlations between oil, the 10-year Treasury, mortgage rates (the MBS proxy), PCE and CPI inflation, and the S&P 500 to find out which relationships are real and which are just coincidence.
Correlation runs from −1 (they move in opposite directions) to +1 (they move together). Above about 0.5 is meaningful. Near 0 means no real relationship.
Key takeaways
1. The correlation heat map: monthly changes
This is the honest test: when one moves this month, does the other move too? Notice that almost every pair weakens compared with the levels view. Oil → inflation and the 10-year → mortgage rates hold up. The S&P 500 vs. the 10-year collapses to about zero.
Correlation of month-to-month changes
2. The same map using levels (and why it can fool you)
Level correlations compare the raw readings over the decade. They get inflated when two series simply trend the same way over time. Example of that trend bias: the S&P 500 vs. the 10-year shows +0.67 here, but only +0.04 on monthly changes.
Correlation of levels
3. See it over time
Each series below is rescaled (z-score) so they share one axis. What matters is whether the lines rise and fall together.
10-Yr Treasury vs. 30-Yr mortgage rate
Oil (WTI) vs. CPI inflation
S&P 500 vs. 10-Yr Treasury
4. Relationships shift: rolling 24-month correlation with the 10-year
Based on monthly changes, this shows how stable (or not) each link to bond yields has been. The S&P 500's link flipped from strongly positive in 2020–2021 to negative through 2022–2024, and has drifted back toward slightly positive. CPI's link to the 10-year has strengthened again in 2026.
Rolling 24-month correlation with the 10-Yr Treasury
5. What this means for home buyers and homeowners
- Watch the 10-year Treasury. With a +0.96 correlation (+0.84 on monthly changes), it's the single best daily signal for where mortgage rates are heading.
- Inflation reports matter because they move the 10-year. That's why a hot CPI print like this morning's pushes bond yields and mortgage rates up.
- Oil is an early warning. Oil feeds inflation, and inflation feeds the Fed and bond yields.
- Don't read too much into the stock market. On monthly changes, stocks and the 10-year barely move together.
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Frequently asked questions
What moves mortgage rates the most?
The 10-year Treasury yield. Over the past decade its correlation with the 30-year fixed mortgage rate was +0.96 on levels and +0.84 on monthly changes, the strongest link of any pair we tested.
Does oil affect mortgage rates?
Indirectly. Oil is strongly tied to inflation (+0.80 with PCE on levels) and moderately to the 10-year yield (+0.39 on monthly changes). Its direct link to mortgage rates on monthly changes is weak (+0.17).
Do stocks and mortgage rates move together?
Not much. On monthly changes, the S&P 500 and the 10-year show about 0 correlation, and the S&P vs. mortgage rates is −0.29, meaning mortgage spreads tend to widen when stocks sell off.
Why use monthly changes instead of levels?
Levels can look related just because two series trend the same direction over years. Monthly changes test whether they actually move at the same time, which is the more reliable read.
How this was built
Series: WTI crude (MCOILWTICO), 10-Year Treasury yield (GS10), Freddie Mac 30-yr fixed rate (MORTGAGE30US) as the MBS proxy (mortgage rates are set by MBS yields; free MBS price data isn't published on FRED). PCE = PCE price index YoY % (PCEPI); CPI = CPI-U YoY % (CPIAUCSL; Oct. 2025 missing due to the government shutdown, interpolated). S&P 500 (SP500). All monthly averages. "Changes" = monthly % change for oil and the S&P, monthly change in points for rates and inflation. Level correlations can be inflated by shared long-term trends; the changes view is the more reliable read. Correlation is not causation.