‘This Is the Pain That Comes With Bringing Inflation Down’: Economist Says Higher Rates Are Here to Stay

‘This Is the Pain That Comes With Bringing Inflation Down’: Economist Says Higher Rates Are Here to Stay

Omor Ibne Ehsan

Wed, September 23, 2026 at 5:37 PM GMT+3 5 min read

• RKT -2.28%

Quick Read

• RKT is down 34% to $12.74, but its $2 trillion servicing book holds $320 billion in above-6% mortgages ready to refinance when rates fall.

• Julia Coronado flagged the unanimous Fed hike as proof no pivot debate exists inside the room, signaling a prolonged high-rate grind ahead.

• WTI crude surged from $77 to $107, spreading inflation into services and keeping the Fed's foot on the brake as housing sales hit a one-year low.

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Equity indexes keep printing highs on the AI trade while the central bank keeps saying money will stay expensive. Those two stories cannot both be right about the discount rate, and one of them will bend.

On Marketplace Morning Report, economist Julia Coronado described the friction plainly: "Money is more expensive. So that will ultimately work by reducing demand. And that will hurt things like housing, which has already been weak. But this is the pain that comes with bringing inflation down." She also flagged that the most recent hike was "not a contested decision. It was unanimous," which strips out the strongest early tell that a pivot is being debated inside the room.

The macro tape backs her up. The federal funds upper bound sits at 4.00% as of September 22, 2026, the 10-year Treasury yield closed at 4.96%, and WTI crude has climbed to $107.02 a barrel. Core PCE, the Fed's preferred inflation gauge, keeps drifting up. That combination points to a slower grind rather than imminent cuts, and it is the environment you have to underwrite Rocket Companies (NYSE:RKT) into. It is a fintech company that deals with mortgages.

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Housing Is Where the Pain Lands First

Coronado named housing as the transmission channel, and existing-home sales are already there. The August reading was 3.98 million units annualized, the lowest print in a year and inside the range the series classifies as a soft market driven by high mortgage rates.

Low turnover starves everything attached to a home sale: brokerages, lenders, title, appliances, renovation retail. Rocket sits at two of the biggest choke points, origination and servicing.

Management said the rebound simply never came. On the Q2 2026 call, CFO Brian Brown said: "The expected housing recovery in 2026 has not materialized as increasing rates continue to pressure affordability." He guided Q3 adjusted revenue to $2.5 billion to $2.7 billion, a step down from Q2.

Why an Oil Shock Complicates the Path

An oil shock is harder for policy to fix than a demand shock, because rates cannot produce barrels. WTI moved from $76.78 on August 5 to above $107 by September 15.

Energy costs migrate into airfares and shipping, which is how a goods problem broadens into a services problem. That broadening is what keeps the Fed's hand on the brake even as growth slows, and it is why a unanimous vote lands differently now than it would have a year ago.

Bull and Bear Case for RKT Stock

RKT closed at $12.74, down 34.19% year-to-date and 35.72% over the last twelve months. The Street's average target sits at $17.70, and the forward multiple is around 16.

The bull case rests on the platform Rocket assembled by buying Mr. Cooper and Redfin. Servicing unpaid principal balance now stands at $2 trillion, and $320 billion of that carries a note rate above 6%, ready to refinance as soon as mortgage rates ease. Management says more than 70% of revenue now comes from recurring or less rate-sensitive lines.

Q2 delivered record purchase share of 6.2% and refinance share of 14.3%, adjusted EBITDA of $766 million, and adjusted EPS of $0.16, per the company's 8-K earnings release. If rates roll over, the recapture math on that servicing book is genuine upside.

The bear case is that the wait keeps costing money. MSR fair value took a $616 million negative mark in Q2 as rates moved against the book, Q3 revenue is guided lower, and CNBC's Jim Cramer told viewers on September 18 that he cannot recommend the stock. The 200-day moving average at $15.89 sits well overhead as resistance.

The deciding variable is the 10-year Treasury yield. A durable move below 4% pulls mortgage rates down and lights up the recapture opportunity on that above-6% cohort. A grind higher, fed by oil-driven inflation, keeps origination volumes soft and MSR marks volatile. Coronado's message is that the second path is currently the base case.

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