Mortgage rates have shown significant volatility in response to tariff announcements, often moving in two stages: a brief initial drop followed by a sustained climb as inflation fears set in.
When major tariffs were announced (e.g., April 2025), mortgage rates initially tumbled. For instance, the 30-year fixed rate fell 12 basis points immediately following an announcement that investors fled stocks for the safety of Treasury bonds. This relief was often short-lived. Rates typically climbed back up within days as markets braced for “tariff-induced inflation” and a widening budget deficit. Over the past year, this appears to reflect the market’s response.
The US Supreme Court’s decision on February 20, 2026, to scrap former president Donald Trump’s global tariffs sent an immediate jolt through bond markets and revived expectations that the Federal Reserve could cut rates sooner than investors have anticipated. This is good news for mortgage rates, but following the ruling, President Trump criticized the decision and quickly announced a new 10% global tariff and then later increased to 15%.
So, then the tariffs are back again within a day. Also, if the government had to repay tariffs, it would have to borrow more money to make up for the shortfall. This would make treasury rates go up in response to that. This is not good for mortgage rates as they could increase rapidly upward.
Currently the 30-year mortgage rates are in the mid to high 5% range. The lowest it has been in 3 years If you’re considering refinancing to get a mortgage rate around 5%, or if you’re unsure about locking your rate on a purchase loan, it would be wise to secure your rate now.
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