Mortgage rates are definitely higher today--the highest since January 13th, 2025. Today's Fed announcement had something to do with that. But while the Fed hiked the Fed Funds Rate, that had NOTHING to do with mortgage rates moving higher this afternoon. In fact, this is very easy see on a chart of bond market movement. We can use 10yr Treasuries as a more active proxy for the bonds that underlie mortgage rate movement. The Fed hike was not only almost 100% priced into financial markets, but it had no major impact on bonds when it was announced at 2pm. It wasn't until 2:30pm--when Fed Chair…
Huge Volatility After Fed, But The Coming Days Will Tell The Story Bonds ended the day only modestly worse off than yesterday afternoon. That's a pretty impressive accomplishment considering the Fed hiked rates and communicated at least one more rate hike in 2026. Nearly half the FOMC sees at least 2 more hikes in this cycle. Warsh's comments ratcheted up the hawkishness considerably. Intraday market movement told a completely different story compared to the modest day-over-day change. The rate hike itself had no impact. Case in point bonds didn't move from 2pm to 2:30pm ET. It was only after…
The Federal Open Market Committee approved the following statement for release by a 9 12 – 3 0 vote: The Committee decided to maintain raise the target range for the federal funds rate at 3-1/2 by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace despite pace. While uncertainty remains elevated uncertainty that owes, in owing, in part, to the conflict in the Middle East. geopolitical developments, domestic…
A while back I was watching the news on TV, and they were interviewing a couple whose home was threatened by a tornado, but who didn’t leave. “God will protect us,” they told the reporter as the wind picked up. Who did they think sent the tornado in the first place? Lenders and servicers know that “tornado alley” has shifted, and with it the geographic range of possible damage. It’ll be 98 degrees here in Dallas today, although Robbie and I are heading to Vancouver, WA, to visit Banner Bank for its Mortgage Banking Sales Conference. The fact is that this summer has been the hottest on record.…
There are perhaps no other Fed announcements in recent memory worthy of more anticipation than the one we'll get today. While some of the recent data could be used to argue patience, far more data suggests a hike. The market agrees based on recent moves in yields and Fed Funds Futures. The question remains as to whether Warsh has a firm conviction in one direction or another. The meeting is interesting because we're about to find out. Bonds are off to a stronger start, building on yesterday's technical support, but also possibly benefiting from lower oil prices overnight. Nevertheless, we…
Some Signs of Resilience But It's Still Anyone's Game After several consecutive business days of abject unpleasantness in the bond/mortgage market, Tuesday finally offered a modest consolation. During domestic trading hours, every attempt to push 10yr yields over 5% was met with a supportive bounce--presumably from value buyers targeting 5% as a good entry point to own 10yr notes for investment purposes. We wouldn't read too much into this just yet. It is a defensible conclusion today (especially in light of oil prices surging over to over $106), but Wednesday's Fed reaction could completely…
Mortgage rates moved higher for the 6th day in a row on Tuesday and to the highest levels since January, 2025. The average top-tier 30yr fixed rate is up to 7.22% and the most prevalently-quoted top-tier rate is 7.25%. Over the past 6 days, the average is up 0.33%, which is is the most abrupt jump since October 2024. At least some of the recent volatility is due to the implications of recent economic data and oil price implications on Fed policy. Tomorrow brings the next regularly-scheduled Fed announcement. Markets are heavily betting that the Fed hikes rates at this meeting. Despite…
Today we’re in Dallas for the Loan Vision Innovation Conference 2026, and LV recently rolled out its AI accounting software Luna. The CEOs, CFOs, and Controllers here are focused on measuring, analyzing, and interpreting data, including volume. MCT's September Indices Report reflects a total lock volume decline month over month in August, with purchase and rate/term refinances both pulling back. (Cash out refinances were the lone category to move higher.) And according to Curinos proprietary application index, August 2026 funded mortgage volume decreased 2 percent Y-o-Y and decreased 9…
With no meaningful econ data on tap today and no high stakes events, bonds are left to watch news headlines and attend to last-minute positioning goals before tomorrow's Fed announcement. There's a bit more of a disconnect between oil prices and bond yields than normal today. Earlier in the overnight session, yields actually led the way higher. In the past hour, however, oil is spiking and yields are trying to hold under yesterday's domestic session highs. This might (MIGHT!) speak to some level of exhaustion among sellers in the long end of the curve, or some value buyers who like the…
Decent Mid-Day Recovery But No Change to Bigger Picture Monday wasn't too different from last Friday in that the bond market began the day with AM volatility that gave way to minimally changed yields by the close. The order was reversed, however, with the weaker trading in the AM and rally back to unchanged levels for the close. Another key difference was that the mid-day rally was clearly drew inspiration from measurable events (in this case, war-related newswires that helped oil prices recover most of the morning's increase. Shorter-dated yields underperformed as there was no meaningful…
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