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14th October, 25
Yields Hug Multi-Week Lows After Powell Speech
Yields Hug Multi-Week Lows After Powell Speech Bonds were remarkably resilient over the extended weekend given the moderate rebound in the stock market. As of Friday afternoon, yields and stocks swooned together in response to trade war escalation with China. Stocks recovered half those losses by 3pm, but were unchanged to slightly stronger. The morning hours suggested a modest sell-off, but buyers returned after Powell's speech. He didn't say anything that was obviously worth a rally, so perhaps it was the absence of hawkishness that helped. Market Movement Recap 09:38 AM Losing some
Yields Hug Multi-Week Lows After Powell Speech
Yields Hug Multi-Week Lows After Powell Speech Bonds were remarkably resilient over the extended weekend given the moderate rebound in the stock market. As of Friday afternoon, yields and stocks swooned together in response to trade war escalation with China. Stocks recovered half those losses by 3pm, but were unchanged to slightly stronger. The morning hours suggested a modest sell-off, but buyers returned after Powell's speech. He didn't say anything that was obviously worth a rally, so perhaps it was the absence of hawkishness that helped. Market Movement Recap 09:38 AM Losing some
14th October, 25
Mortgage Rates Maintain Last Week's Gains
Last week ended with mortgage rates dropping to their best levels since September 17th. Over the weekend, the underlying bond market maintained the gains seen on Friday afternoon, thus allowing most lenders to set rates at least as low as they were at that time. The average lender is actually just slightly lower today, thus making this another new multi-week low. The counterpoint is that the range is still relatively narrow, which each day during this stretch (roughly 4 weeks) falling inside a range of 6.31 to 6.39. As always, keep in mind that the MND index is an average top tier rate (
Mortgage Rates Maintain Last Week's Gains
Last week ended with mortgage rates dropping to their best levels since September 17th. Over the weekend, the underlying bond market maintained the gains seen on Friday afternoon, thus allowing most lenders to set rates at least as low as they were at that time. The average lender is actually just slightly lower today, thus making this another new multi-week low. The counterpoint is that the range is still relatively narrow, which each day during this stretch (roughly 4 weeks) falling inside a range of 6.31 to 6.39. As always, keep in mind that the MND index is an average top tier rate (
14th October, 25
Signing, Borrower Retention, LOS, QC Audit, AVM Tools; Slowing Economy = Lower Rates
“Where do amputees get prosthetics on a budget? The secondhand store.” Budget, stalemate, and shutdown news continues in Washington DC. The sun still comes up in the morning, and there is news on related issues. For example, thank you to Sean S. who told me that HUD opened the suggestions window for improving the HECM (reverse mortgage) product. The reasons why Treasury and mortgage rates remain elevated despite the shutdown and Fed’s rate cuts will be discussed in the Capital Markets Wrap at 3PM ET, presented by Polly. In other shut down news, “USAA has stepped up for military service
Signing, Borrower Retention, LOS, QC Audit, AVM Tools; Slowing Economy = Lower Rates
“Where do amputees get prosthetics on a budget? The secondhand store.” Budget, stalemate, and shutdown news continues in Washington DC. The sun still comes up in the morning, and there is news on related issues. For example, thank you to Sean S. who told me that HUD opened the suggestions window for improving the HECM (reverse mortgage) product. The reasons why Treasury and mortgage rates remain elevated despite the shutdown and Fed’s rate cuts will be discussed in the Capital Markets Wrap at 3PM ET, presented by Polly. In other shut down news, “USAA has stepped up for military service
14th October, 25
One Of The Few Times We Can Say "Strong Red Start"
Bonds are flashing red on the screen (depending on when you look), but even at their weakest levels of the morning, we'd still consider this a stronger start. Reason being: Friday afternoon's rally lasted 10 whole minutes right at the end of the session. Before that, 10yr yields were around 4.06 and 5.0 MBS were trading just under 99.5. Now this morning, 10yr yields are in the mid 4.03's and MBS are at 99.55--both easily stronger compared to the 4:50pm levels from Friday
One Of The Few Times We Can Say "Strong Red Start"
Bonds are flashing red on the screen (depending on when you look), but even at their weakest levels of the morning, we'd still consider this a stronger start. Reason being: Friday afternoon's rally lasted 10 whole minutes right at the end of the session. Before that, 10yr yields were around 4.06 and 5.0 MBS were trading just under 99.5. Now this morning, 10yr yields are in the mid 4.03's and MBS are at 99.55--both easily stronger compared to the 4:50pm levels from Friday
10th October, 25
Markets Rocked by New Tariff Drama
Markets Rocked by New Tariff Drama Bonds were already having a decent day this morning with overnight market movers bringing yields in line with the lower end of the recent range. Mid-day drama caused massive selling in stocks which spilled over and made for an extension of the already-decent bond rally. The culprit? An unexpected tariff threat from Trump in response to... well... something (seriously, we're not sure). Then, just minutes before the end of trading for the 3 day weekend, an official announcement (again, with cryptic references to untoward actions by China). Bonds managed to
Markets Rocked by New Tariff Drama
Markets Rocked by New Tariff Drama Bonds were already having a decent day this morning with overnight market movers bringing yields in line with the lower end of the recent range. Mid-day drama caused massive selling in stocks which spilled over and made for an extension of the already-decent bond rally. The culprit? An unexpected tariff threat from Trump in response to... well... something (seriously, we're not sure). Then, just minutes before the end of trading for the 3 day weekend, an official announcement (again, with cryptic references to untoward actions by China). Bonds managed to
10th October, 25
Mortgage Rates Lowest Since Fed Day
Mortgage rates saw their biggest day-over-day decline of the past several weeks today in response to unexpected news regarding additional tariffs on China. Trump had previously been scheduled to meet with China's President Xi in 2 weeks, but today said there was no reason to do so and that the administration is currently calculating a massive increase in Chinese tariffs. Stocks and bonds immediately responded with the former moving lower and bonds rallying. When bonds rally, interest rates move lower, all else equal. Mortgage lenders use mortgage-backed securities (MBS) to
Mortgage Rates Lowest Since Fed Day
Mortgage rates saw their biggest day-over-day decline of the past several weeks today in response to unexpected news regarding additional tariffs on China. Trump had previously been scheduled to meet with China's President Xi in 2 weeks, but today said there was no reason to do so and that the administration is currently calculating a massive increase in Chinese tariffs. Stocks and bonds immediately responded with the former moving lower and bonds rallying. When bonds rally, interest rates move lower, all else equal. Mortgage lenders use mortgage-backed securities (MBS) to
10th October, 25
Refi Demand Ebbs Gradually As Rates Remain Rangebound
Mortgage application activity declined again last week as refi demand continues pulling back after the surge in mid September. According to MBA’s Weekly Applications Survey for the week ending October 3, total volume fell 4.7% on a seasonally adjusted basis and 5% unadjusted. The Refinance Index decreased 8% from the previous week but remains 18% higher than the same week one year ago. Refinancing activity pulled back broadly across conventional and VA segments after climbing to multi-year highs in September. This is a logical move considering rates were at long-term lows in mid-September
Refi Demand Ebbs Gradually As Rates Remain Rangebound
Mortgage application activity declined again last week as refi demand continues pulling back after the surge in mid September. According to MBA’s Weekly Applications Survey for the week ending October 3, total volume fell 4.7% on a seasonally adjusted basis and 5% unadjusted. The Refinance Index decreased 8% from the previous week but remains 18% higher than the same week one year ago. Refinancing activity pulled back broadly across conventional and VA segments after climbing to multi-year highs in September. This is a logical move considering rates were at long-term lows in mid-September
10th October, 25
Audit, Interest Rate Risk Products; Gov't Program News; Home Builder Interview; Shutdown and Data Releases
The stalemate & shutdown continue, all but eliminating the government release of economic news. Recall that the U.S. Treasury posted a $345 billion budget deficit in August, the largest monthly deficit of 2025 and the 2nd-worst August on record but helped by tariff revenue. This is up from July’s $291 billion deficit and has only been surpassed by last year’s $380 billion deficit. Government spending surged to $689 billion for the month. Through the first 11 months of FY2025, the U.S. deficit was up to $1.97 trillion, on track to be the 3rd-largest annual deficit in history, after 2020
Audit, Interest Rate Risk Products; Gov't Program News; Home Builder Interview; Shutdown and Data Releases
The stalemate & shutdown continue, all but eliminating the government release of economic news. Recall that the U.S. Treasury posted a $345 billion budget deficit in August, the largest monthly deficit of 2025 and the 2nd-worst August on record but helped by tariff revenue. This is up from July’s $291 billion deficit and has only been surpassed by last year’s $380 billion deficit. Government spending surged to $689 billion for the month. Through the first 11 months of FY2025, the U.S. deficit was up to $1.97 trillion, on track to be the 3rd-largest annual deficit in history, after 2020
10th October, 25
Overnight Gains on Fed Comments And Japanese Politics (Really)
At the start of the week, we noted Japanese political developments as a key reason for overnight losses on Monday morning. This had to do with Takaichi winning control of Japan's LDP party, thus making her the front runner to become the Prime Minister. Her economic views fueled fears that Japan's central bank would ultimately need to sell Treasuries in order to stabilize currency devaluation. Thus, Treasury yields rose. Now today, another party announced an exit from its coalition with the LDP, thus lowering the odds of the fears that were traded on Monday. Bonds logically rallied in
Overnight Gains on Fed Comments And Japanese Politics (Really)
At the start of the week, we noted Japanese political developments as a key reason for overnight losses on Monday morning. This had to do with Takaichi winning control of Japan's LDP party, thus making her the front runner to become the Prime Minister. Her economic views fueled fears that Japan's central bank would ultimately need to sell Treasuries in order to stabilize currency devaluation. Thus, Treasury yields rose. Now today, another party announced an exit from its coalition with the LDP, thus lowering the odds of the fears that were traded on Monday. Bonds logically rallied in
9th October, 25
Uneventful Day; MBS Underperform
Uneventful Day; MBS Underperform It's not uncommon to see MBS outperform their Treasury benchmarks in the run up to a round of weekly Treasury auctions only to underperform when the auction cycle wraps up. That underperformance (or rather, Treasury outperformance) was on full display today with MBS losing about a quarter point while 5yr notes lost about half as much. While bonds are slightly closer to the weaker end of the recent range, they're still very much inside it. Market Movement Recap 09:25 AM Moderately weaker so far with 5.0 coupons down 6 ticks (.19) and 10yr yields up 2.6bps at 4.
Uneventful Day; MBS Underperform
Uneventful Day; MBS Underperform It's not uncommon to see MBS outperform their Treasury benchmarks in the run up to a round of weekly Treasury auctions only to underperform when the auction cycle wraps up. That underperformance (or rather, Treasury outperformance) was on full display today with MBS losing about a quarter point while 5yr notes lost about half as much. While bonds are slightly closer to the weaker end of the recent range, they're still very much inside it. Market Movement Recap 09:25 AM Moderately weaker so far with 5.0 coupons down 6 ticks (.19) and 10yr yields up 2.6bps at 4.