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Inflation Risks Keep Interest Rates High Globally
Confirmed
In Short: Inflation risks and ongoing conflicts, especially in the Middle East, are keeping interest rates high globally, according to reports from CBS News and FXStreet.
Inflation risks and ongoing conflicts, especially in the Middle East, are keeping interest rates high globally, according to reports from CBS News and FXStreet. This has led to mortgage rates remaining stubbornly unchanged, leaving many borrowers hoping for a positive shift in the coming months.
The Federal Reserve is expected to raise rates in September, with further hikes anticipated in 2027, according to projections from FXStreet. In the Eurozone, the European Central Bank is also expected to raise rates to 2.5% in September, driven by robust economic growth and inflationary pressures.
With mortgage rates known to fluctuate daily, borrowers are advised to keep an eye on upcoming economic reports, including inflation data and unemployment numbers, which could influence rate movements. The ongoing conflict in the Middle East and high government issuance volumes are contributing to a structurally higher interest rate environment, according to FXStreet and the Independent.
Despite the challenges, there is hope that inflation expectations will ease as energy markets stabilize, potentially leading to a more favorable rate climate for borrowers in the medium term.
What's confirmed
What's still developing
- Start by seeing which mortgage interest rate you currently qualify for here.
- If it shows another reduction as the July report did, it could serve as motivation for the Federal Reserve to cut rates later in the month.
- August 25, 2026 / 3:54 PM EDT / CBS News Following a month in which inflation improved but there was no Federal Reserve meeting in which to capitalize on the news, many borrowers find themselves looking forward to September and some potential positive movement again.
- With an inflation report scheduled for release on September 11, a Federal Reserve meeting the week after, not to mention unemployment numbers released earlier in the month – all of which have the potential to impact the rate climate – borrowers can easily find themselves in a markedly different position one month from now.
- After rates improved by more than a full percentage point in 2025, much of that decline was reversed in 2026 and, in recent months, mortgage purchase and refinance rates have remained stubbornly unchanged.
- This has left borrowers with limited ways to secure an affordable rate and it's left many on the sidelines urgently hoping for some change that could actually improve the mortgage interest rate climate in a positive way.
- Projecting future mortgage rate movement is inherently difficult to do with precision, as any number of factors – both known and unknown – have the potential to drive rates in either direction.
- German and US government bonds are trading at their highest yield levels since the start of the Persian Gulf crisis.