If you are watching only Federal Reserve announcements to decide when to buy a home, you are missing the market that reprices your mortgage every trading day: mortgage-backed securities (MBS).
Scale: each line runs from 0% at its own low to 100% at its own high within this window. The 0–100 values are a visual comparison of direction and timing, not interest rates or percentage increases. Weekly points align to Freddie Mac survey dates; the crack spread uses the most recent matched wholesale quote within six days. The Fed line is drawn in steps. Similar movement does not prove one series caused another.
The purple Fed line stays flat between policy decisions. The mortgage and Treasury lines respond between those decisions. The crack-spread line makes refining pressure visible on the same timeline. The blue and coral lines move as investors and lenders respond to incoming information. The 10-year Treasury is a useful directional comparison for mortgages, but it does not set your mortgage rate. The gap between mortgage rates and Treasury yields also changes.
Fed upper bound: 4.00% · Sep 17 onward10-year Treasury: 5.11% · Sep 23Freddie Mac 30-year: 6.95% · Sep 17WTI oil: $96.41 · Sep 22
These are the latest verified readings from each source available for this post, taken on different dates. Freddie Mac's weekly survey does not represent the mortgage quote available after the September 23 bond selloff. Request a same-day quote for a current rate.
| Compared with Freddie Mac 30-year average | Weekly correlation |
|---|---|
| 10-year Treasury yield | +0.89 |
| Fed target upper bound | -0.12 |
| WTI crude price | +0.57 |
| Calculated 3-2-1 crack spread | +0.78 |
53 matched weekly observations from September 18, 2025 through September 17, 2026. Treasury, Fed, WTI and crack-spread inputs are aligned to Freddie Mac survey dates, using the most recent available observation within six days. Pearson correlation of levels; a high value is not evidence of causation or predictive power. Oil can affect inflation expectations with a lag. The average mortgage-minus-Treasury gap in this sample was 2.01 percentage points, but the gap itself changed over time.
After a lender makes a loan, that loan may be sold and pooled into an MBS. Investors decide what price they will pay for that bond. When MBS prices fall, the return investors demand rises, and lenders may respond with a higher note rate, more discount points, or both. When MBS prices rise, pricing may improve. Treasury yields often move in the same direction as MBS yields, but MBS-specific supply, prepayment risk and investor demand can change the difference between them.
All points use Freddie Mac weekly survey dates from January through September 17. Oil and crack spread are dollars per barrel; Treasury yield is percent; mortgage–Treasury gap is percentage points. These panels share a timeline, with separate labeled scales. They reveal divergence rather than asserting oil directly determines yields.
Oil can push up gasoline, diesel and transportation costs. If higher costs spread into other prices or inflation expectations, investors may demand higher bond yields. That path is indirect: oil and mortgage rates do not have a fixed one-to-one relationship. Strong growth, Treasury supply, Fed expectations and MBS-specific conditions can also move yields.
The 3-2-1 crack spread approximates the market value of two barrels of gasoline plus one barrel of distillate, minus three barrels of crude oil. It is a refining margin indicator, measured in dollars per barrel when divided by three. If refining capacity or finished fuel is constrained, gasoline and diesel can remain expensive even when crude softens. That can keep near-term inflation concern alive.
The Fed raised its policy range by a quarter point on September 16, to 3.75%–4.00%, citing elevated inflation. Then September 23's flash S&P Global surveys reported services PMI of 58.7 and manufacturing PMI of 57.0, showing unexpectedly strong activity. The 10-year Treasury yield moved from 4.96% on September 22 to 5.11% on September 23—a 0.15-percentage-point move in one day. Bond prices moved the other way. This is a useful example of mortgage-market volatility between Fed meetings, though a one-day market move cannot be assigned to one cause with certainty.
The Fed's closely watched personal consumption expenditures inflation report arrives September 30. The Cleveland Fed's September 23 nowcast was 0.34% for August headline PCE and 0.27% for August core PCE, approximately 0.3% each when rounded to one decimal. September's strong PMI is a signal about September business activity, not an input that changes measured August prices.
Bond yields may rise further if core inflation surprises upward. Recheck the current quote and approval payment.
Much may be priced in already. Revisions, spending data and oil can still move the market.
Bonds may recover, but one report does not guarantee a full reversal or an immediate Fed cut.
A national rate average cannot tell you what you qualify for today. Bring the property price, down payment and estimated taxes and insurance, and we can compare the actual payment and available loan options.
The Rate Update with Dan Frio · Ask your lending team for today's quote and lock terms.
Historical chart window: January–September 2026, using weekly Freddie Mac observation dates for 10-year Treasury (DGS10), Freddie Mac 30-year mortgage (MORTGAGE30US), and WTI crude (DCOILWTICO); Fed target upper bound is the month-end reading from DFEDTARU. Latest 10-year closing yield from U.S. Treasury; Freddie Mac weekly survey; Fed statement; S&P Global flash PMI; Cleveland Fed nowcast; EIA crack-spread explanation; gasoline spot (DGASNYH) and heating oil spot (DHOILNYH) for the calculated spread. These series differ in sampling frequency. These historical correlation coefficients are descriptive and can change with the sample period; they do not establish causation.
