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17th July, 26
Bonds Picking Up Some Safe-Haven Demand
In a month where bonds have made a visible reconnection with fuel prices thanks to the Iran war resurgence, there have been several notable departures in the correlation. Today is the latest example. If we're splitting hairs, we can still observe yields and fuel prices generally moving in the same direction overnight, but when fuel prices surged between 4am and 9am, bonds didn't really follow. One of the only ways to reconcile that phenomenon is via the fairly brisk selling in equities. S&P futures have repeatedly bumped into resistance around 7630. Thursday was the latest
Bonds Picking Up Some Safe-Haven Demand
In a month where bonds have made a visible reconnection with fuel prices thanks to the Iran war resurgence, there have been several notable departures in the correlation. Today is the latest example. If we're splitting hairs, we can still observe yields and fuel prices generally moving in the same direction overnight, but when fuel prices surged between 4am and 9am, bonds didn't really follow. One of the only ways to reconcile that phenomenon is via the fairly brisk selling in equities. S&P futures have repeatedly bumped into resistance around 7630. Thursday was the latest
16th July, 26
Ultimately Uneventful Despite Modest Weakness
Ultimately Uneventful Despite Modest Weakness Bonds lost ground modestly today with the ultimate damage being roughly an eighth of a point for MBS and less than a bp for 10yr yields. The selling was led by the short end of the curve (i.e. 2yr yields were up 1.5bps). There wasn't any obvious catalyst apart from an ongoing surge in fuel prices. Perhaps most notably, fuel futures peaked at the same time as bond yields and both declined together after that. We're also not bothered by the short end leading the selling considering how resoundingly it led the rally over the past 2 days. Bottom line:
Ultimately Uneventful Despite Modest Weakness
Ultimately Uneventful Despite Modest Weakness Bonds lost ground modestly today with the ultimate damage being roughly an eighth of a point for MBS and less than a bp for 10yr yields. The selling was led by the short end of the curve (i.e. 2yr yields were up 1.5bps). There wasn't any obvious catalyst apart from an ongoing surge in fuel prices. Perhaps most notably, fuel futures peaked at the same time as bond yields and both declined together after that. We're also not bothered by the short end leading the selling considering how resoundingly it led the rally over the past 2 days. Bottom line:
16th July, 26
Mortgage Rates Move Slightly Higher
While some news stories suggest that rates are the highest in 11 months today, that's not quite true. The highest rates of the year were seen on July 13th and May 19th when our 30yr fixed index hit 6.75%. The index was at 6.68% today, up from 6.64% yesterday. Any news regarding "highest rates since August 2025" is almost certainly citing Freddie Mac's weekly rate index which takes a 5 day trailing average rate through Wednesday and reports it on Thursday. As for the reason for today's increase, there really isn't a satisfying scapegoat. The strongest case to be made is that bond yields (
Mortgage Rates Move Slightly Higher
While some news stories suggest that rates are the highest in 11 months today, that's not quite true. The highest rates of the year were seen on July 13th and May 19th when our 30yr fixed index hit 6.75%. The index was at 6.68% today, up from 6.64% yesterday. Any news regarding "highest rates since August 2025" is almost certainly citing Freddie Mac's weekly rate index which takes a 5 day trailing average rate through Wednesday and reports it on Thursday. As for the reason for today's increase, there really isn't a satisfying scapegoat. The strongest case to be made is that bond yields (
16th July, 26
Hedging, Data Mapping, BER Letter, PPE Tools; AI Ramifications; Atty. Mitch Kider Joins Big Picture
Nearly every lender is at least learning about AI, but on the flip side there are things like New York’s ban on data centers. Lenders and vendors are not the only ones riding the tech wave, and no LO wants to be behind their client in tech knowledge. Consumers are now researching affordability, neighborhoods, and monthly payments long before contacting a lender. So, the next competitive advantage in mortgage lending lies in engaging buyers earlier through real-time affordability tools, personalized insights, and integrated financing experiences that build trust before rate shopping begins.
Hedging, Data Mapping, BER Letter, PPE Tools; AI Ramifications; Atty. Mitch Kider Joins Big Picture
Nearly every lender is at least learning about AI, but on the flip side there are things like New York’s ban on data centers. Lenders and vendors are not the only ones riding the tech wave, and no LO wants to be behind their client in tech knowledge. Consumers are now researching affordability, neighborhoods, and monthly payments long before contacting a lender. So, the next competitive advantage in mortgage lending lies in engaging buyers earlier through real-time affordability tools, personalized insights, and integrated financing experiences that build trust before rate shopping begins.
16th July, 26
Are Bonds High on Crack (Spreads)?
The term "crack spread" is quickly becoming mainstream--especially over the past few weeks. It's more of a concept than a specific metric, but it most frequently refers to the margin between input and output costs for fuel (gas, diesel, etc). Petro-nerds seem to like the 3-2-1 crack spread, which covers both gas and diesel (3 barrels of oil margin vs 2 barrels of gas and 1 barrel of diesel). While it's true that we could simply look at RBOB or ULSD futures to gauge price changes at the pump, crack spreads speak to the current state of supply/demand imbalance. They suggest conditions remain
Are Bonds High on Crack (Spreads)?
The term "crack spread" is quickly becoming mainstream--especially over the past few weeks. It's more of a concept than a specific metric, but it most frequently refers to the margin between input and output costs for fuel (gas, diesel, etc). Petro-nerds seem to like the 3-2-1 crack spread, which covers both gas and diesel (3 barrels of oil margin vs 2 barrels of gas and 1 barrel of diesel). While it's true that we could simply look at RBOB or ULSD futures to gauge price changes at the pump, crack spreads speak to the current state of supply/demand imbalance. They suggest conditions remain
15th July, 26
Wednesday's Gains Had More Staying Power Than Tuesday's
Wednesday's Gains Had More Staying Power Than Tuesday's Both Tuesday's CPI and Wednesday's PPI came in much lower than expected. Both resulted in fairly big bond rallies. Whereas Tuesday's rally faded gradually after the initial pop, Wednesday's rally continued at a moderate pace as the day progressed. The only trade off was that the initial pop was a bit smaller. The net effect is that yields fell to the same levels seen in the few minutes following Tuesday's CPI. In that sense, the rally implies clear resistance at a 10yr yield level of 4.54%. From a strategic standpoint, rate watchers must
Wednesday's Gains Had More Staying Power Than Tuesday's
Wednesday's Gains Had More Staying Power Than Tuesday's Both Tuesday's CPI and Wednesday's PPI came in much lower than expected. Both resulted in fairly big bond rallies. Whereas Tuesday's rally faded gradually after the initial pop, Wednesday's rally continued at a moderate pace as the day progressed. The only trade off was that the initial pop was a bit smaller. The net effect is that yields fell to the same levels seen in the few minutes following Tuesday's CPI. In that sense, the rally implies clear resistance at a 10yr yield level of 4.54%. From a strategic standpoint, rate watchers must
15th July, 26
Mortgage Rates Fall to Lowest Levels in a Week
Mortgage rates moved lower again today following another lower-than-expected reading on an inflation report. Yesterday's Consumer Price Index (CPI) had a bigger impact on the underlying bond market, but today's Producer Price Index (PPI) wasn't far behind. Additionally, bonds did a better job of holding onto the improvement into the afternoon hours. This allowed mortgage lenders to drop rates even more than they did yesterday (0.06% today versus 0.05% yesterday). This takes the average top-tier 30yr fixed rate to 6.64% which is the lowest in just over a week. [thirtyyearmortgagerates
Mortgage Rates Fall to Lowest Levels in a Week
Mortgage rates moved lower again today following another lower-than-expected reading on an inflation report. Yesterday's Consumer Price Index (CPI) had a bigger impact on the underlying bond market, but today's Producer Price Index (PPI) wasn't far behind. Additionally, bonds did a better job of holding onto the improvement into the afternoon hours. This allowed mortgage lenders to drop rates even more than they did yesterday (0.06% today versus 0.05% yesterday). This takes the average top-tier 30yr fixed rate to 6.64% which is the lowest in just over a week. [thirtyyearmortgagerates
15th July, 26
Home Equity, Verification, Asset-Based Lending, MI Tools; Housing Demand Shift; Fed Balance Sheet Thoughts
Certainly the cost gap between renting and owning is widening, and the press is filled with stories that our borrowers see, and MLOs should read, like, “Rent vs. Buy: Is Renting Cheaper Than Buying a Home?” or “Rent or buy? How long it takes for buying a home to pay off in each metro.” Today at 11AM PT on L1’s Mortgage Matters, Developer’s Mortgage COO Taylor Stork discusses lender challenges. Lenders are scrambling to target borrowers “at the top of the funnel, and today at noon PT the Credit Committee, presented by Equifax, David Hadaway, the CEO of Altair Data Resources, to
Home Equity, Verification, Asset-Based Lending, MI Tools; Housing Demand Shift; Fed Balance Sheet Thoughts
Certainly the cost gap between renting and owning is widening, and the press is filled with stories that our borrowers see, and MLOs should read, like, “Rent vs. Buy: Is Renting Cheaper Than Buying a Home?” or “Rent or buy? How long it takes for buying a home to pay off in each metro.” Today at 11AM PT on L1’s Mortgage Matters, Developer’s Mortgage COO Taylor Stork discusses lender challenges. Lenders are scrambling to target borrowers “at the top of the funnel, and today at noon PT the Credit Committee, presented by Equifax, David Hadaway, the CEO of Altair Data Resources, to
15th July, 26
PPI Does Its Best CPI Impression. Bonds Like It
The Producer Price Index (PPI) is not normally a huge market mover, but it has its moments of moderate impact. Today is such a moment as PPI did its best to mimic yesterday's sharply lower CPI. There were also big revisions to previous months which brought annual PPI a full 1.0% lower from last month's initial reading (5.5% today vs a 6.0 previous reading, revised from 6.5% when initially reported). Fuel prices loom large in this data, as evidenced by Core monthly PPI at 0.2 vs 0.3. Unlike yesterday, most of today's shift was seen in revisions to previous months--especially May (headline
PPI Does Its Best CPI Impression. Bonds Like It
The Producer Price Index (PPI) is not normally a huge market mover, but it has its moments of moderate impact. Today is such a moment as PPI did its best to mimic yesterday's sharply lower CPI. There were also big revisions to previous months which brought annual PPI a full 1.0% lower from last month's initial reading (5.5% today vs a 6.0 previous reading, revised from 6.5% when initially reported). Fuel prices loom large in this data, as evidenced by Core monthly PPI at 0.2 vs 0.3. Unlike yesterday, most of today's shift was seen in revisions to previous months--especially May (headline
14th July, 26
Why Were 10yr Yields Only a Few bps Lower Today?
Why Were 10yr Yields Only a Few bps Lower Today? If you missed this morning's commentary, the gist is that inflation for June (via the CPI report) came in much lower than forecast (biggest "miss" in over a year). Given the market's preoccupation with inflation, this logically resulted in an immediate bond rally. 10yr yields only ended up a few bps lower by the end of the day. There are 3 key reasons. The first is purely mechanical and it has to do with the shorter-term rates benefitting the most. Fed Funds Futures did the best with the end-of-year implied rate falling an eighth of a point (or
Why Were 10yr Yields Only a Few bps Lower Today?
Why Were 10yr Yields Only a Few bps Lower Today? If you missed this morning's commentary, the gist is that inflation for June (via the CPI report) came in much lower than forecast (biggest "miss" in over a year). Given the market's preoccupation with inflation, this logically resulted in an immediate bond rally. 10yr yields only ended up a few bps lower by the end of the day. There are 3 key reasons. The first is purely mechanical and it has to do with the shorter-term rates benefitting the most. Fed Funds Futures did the best with the end-of-year implied rate falling an eighth of a point (or