16/09/2026
🚨 INSIDER MORTGAGE INFO: WHY MORTGAGE RATES ARE RISING… AND THE STORY ALMOST NOBODY IS TALKING ABOUT 🚨
If you’ve watched mortgage rates climb recently and you’re waiting to see what the Federal Reserve does tomorrow, there’s something important you need to understand:
Mortgage rates don’t wait for the Fed.
Markets trade on expectations of what’s coming next.
That’s why mortgage rates can rise before the Federal Reserve raises its benchmark rate—and why they can sometimes fall even when the Fed raises rates.
Tomorrow, the Federal Reserve concludes its September meeting, with markets preparing for the possibility of another increase in the federal funds rate.
But here’s the bigger question:
How does the market know what’s coming?
It doesn’t.
It constantly reprices risk based on new information about what the economy may look like six months, a year or even several years from now.
And right now, there is a development thousands of miles away that I believe everyone watching mortgage rates should understand.
🇯🇵 JAPAN.
But first, here’s the 30-second explanation of what normally moves mortgage rates.
INFLATION: Reports such as CPI and PPI tell markets whether prices are continuing to rise. Persistent inflation makes investors demand higher yields for lending money over long periods. August CPI just came in at +0.4% for the month and +3.4% year over year, keeping inflation concerns very much alive.
THE 10-YEAR TREASURY: Mortgage rates don’t simply follow the Federal Funds Rate. The 10-year Treasury is a much better benchmark for understanding movements in longer-term mortgage rates because it reflects expectations for inflation, growth and future interest rates. The 10-year has recently been flirting with the psychologically important 5% level.
MORTGAGE-BACKED SECURITIES (MBS): Most mortgages are ultimately packaged into mortgage-backed securities. Investors compare the return and risk of those securities against alternatives such as Treasuries. When investors demand greater compensation to own MBS, mortgage rates rise.
Now we get to the part I don’t think nearly enough people are discussing.
🇯🇵 WHAT IS HAPPENING IN JAPAN COULD MATTER TO YOUR MORTGAGE RATE
For decades, Japan had extraordinarily low interest rates.
That encouraged enormous amounts of Japanese capital to leave Japan in search of better returns elsewhere—including investments in U.S. Treasury securities.
Japan remains one of the world’s largest holders of U.S. Treasuries.
But that equation is changing.
Japan’s 10-year government bond yield recently reached 3% for the first time since 1996 as inflation and fiscal concerns have increased pressure on the Bank of Japan to raise rates.
Think about what that means.
If you’re a Japanese institution and you can suddenly earn significantly more money investing at home, why take as much currency and market risk sending that money across the Pacific to buy American debt?
That’s where this gets important for us.
If rising Japanese yields cause Japanese investors to keep more money at home—or repatriate some money currently invested overseas—that can reduce an important source of demand for U.S. Treasuries.
Less demand for Treasuries → lower Treasury prices → higher Treasury yields.
And higher Treasury yields can translate into higher borrowing costs and higher mortgage rates here in America.
This isn’t some internet conspiracy theory. Morgan Stanley recently specifically identified the possibility that higher Japanese rates could lead Japanese investors to sell U.S. assets and repatriate capital, potentially pushing U.S. Treasury yields and American borrowing costs higher. Vanguard has similarly warned that higher Japanese rates could keep more Japanese capital at home and reduce an important source of demand for U.S. Treasuries and other global assets.
And the Bank of Japan has its own major rate decision coming this week. Markets are already speculating about both faster Japanese rate increases and potential repatriation of Japanese capital.
THIS IS WHY I’M WATCHING JAPAN.
Everyone in the mortgage business will tell you to watch the Fed.
They’re right.
Watch CPI.
Watch employment.
Watch MBS.
Watch the 10-year Treasury.
But also watch Japan.
Because one of the biggest structural changes occurring in global bond markets is happening outside the United States.
For decades, cheap Japanese money helped provide liquidity to financial markets around the world.
If that era is changing, global investors have to reprice what it costs to borrow money.
And the U.S. mortgage market isn’t isolated from that.
Does this guarantee mortgage rates are going dramatically higher?
No.
There are too many variables in a global economy to make that claim.
But could a sustained shift of Japanese capital back toward Japan put additional upward pressure on U.S. Treasury yields—and therefore potentially mortgage rates?
Absolutely.
And that’s the part of this story I think borrowers, Realtors, builders and mortgage professionals need to start paying attention to.
Because mortgage rates aren’t pricing what happened yesterday.
They’re constantly trying to price what happens next.
And sometimes the biggest clue about what’s coming next isn’t in Washington.
It’s 6,700 miles away in Tokyo. 🇯🇵🇺🇸
Sal Zagami NMLS 2055042
SVP of Construction Lending
Supreme Lending NMLS 2129
📞 502-443-5350
📧 [email protected]
🌐 SLGuerrillaHomeLoans.com
