Derek McGowan breaks down how Middle East tensions pushed oil from $70-80 to $110 per barrel, driving inflation and mortgage rates higher. New banking rules let Chase and Goldman Sachs sell off assets to add liquidity, which partially offsets the pressure. If the conflict cools, rates should ease.
With each new attack in the Middle East right now, mortgage rates hang in the balance. We saw overnight Israel attacked Iran's natural oil field. Iran turned around and attacked Qatar, which is one of the largest natural oil fields in the world. Those things make gas and oil, you know, more rare, which makes the price go up. Normally $70, $80 a barrel is normal. We're at $110 a barrel. That's inflationary. Inflation is the enemy of mortgage rates. Mortgage rates are being pulled in all different directions. Fortunately, some new banking legislation rolled out where it allowed some of the big banks like Chase and Goldman Sachs to liquidate about a up to 4.8% of their assets, which infuses money in the market. So it's balanced it out. But right now, a lot of factors going on. I do think as soon as the war subsides, hopefully soon, start seeing some benefits and mortgage rates will go lower.
