Recent geopolitical tensions tied to the Iran conflict have driven oil prices higher, pushing headline inflation toward 4% and keeping it above the Fed’s 2% target. This has lifted the 10-year Treasury yield above 5% and propelled the 30-year fixed mortgage rate to 7.40% as of early October 2026, its highest level in nearly three years. The Federal Reserve has shifted toward additional policy tightening, with markets pricing in further hikes to the federal funds rate. Mortgage rates remain closely linked to Treasury yields plus a credit spread, with limited room for decline absent cooler inflation data or easing energy pressures. The next CPI release and upcoming FOMC meetings represent key near-term catalysts that could influence year-end pricing.