Keefe, Bruyette & Woods attributes Fannie Mae and Freddie Mac portfolio growth for the narrower spreads, but other reasons include lower volatility.

The accusations, relating to the lender’s marketing programs, including trips for brokers as things of value, stem from a larger racketeering complaint.

First Federal Bank stretched its retail mortgage operations into Louisiana and Mississippi, following its expansion into the Midwest and Arizona in 2023.

The impact of extreme weather remains top of mind for many, with a majority of homeowners citing it as a factor behind purchase or relocation considerations.

Yields gravitated back toward session lows — down three to four basis points on the day — after the December ISM manufacturing gauge unexpectedly dropped.

Bonds Improve Back to Pre-Holiday Levels

While there was some relevant econ data today (ISM Manufacturing), it didn’t have an obvious impact on the bond market. Nonetheless, volume was back at pre-holiday levels. Notably, Dec 11(day after Fed day) was the last day of 2025 that wasn’t affected by progressively lighter participation. 10yr yields closed at 4.15% on that day–the same level as today. The winter holidays don’t always work out this perfectly, but it couldn’t have been any more perfect this year. From here, we can plug back into the incoming econ data and read more significance into any major responses. 

Econ Data / Events

ISM Manufacturing Employment (Dec)

44.9 vs — f’cast, 44.0 prev

ISM Manufacturing PMI (Dec)

47.9 vs 48.3 f’cast, 48.2 prev

ISM Mfg Prices Paid (Dec)

58.5 vs 59.0 f’cast, 58.5 prev

Market Movement Recap

10:01 AM Moderately stronger overnight and at best levels after ISM data. MBS up 2 ticks (.06) and 10yr down 2bps at 4.171

02:57 PM Off the best levels, but still close. MBS up an eighth and 10yr down almost 3bps at 4.162

04:01 PM Sideways at best levels. MBS up 5 ticks (.16) and 10yr down 3.6bps at 4.155

The two days of 2025 with the lowest rates were September 16th and October 28th. Both days happened to be the Tuesdays that preceded Fed rate cuts. On both occasions, those rate cuts were delivered with other comments from the Fed that the bond market didn’t like.  The net effect is/was two very obvious dips and spikes. The second half of December saw the average 30yr fixed mortgage rate inch closer and closer to those previous lows, but we’re still not quite there yet. Today was just another day in that saga as the average lender held right in line with Friday’s latest levels. Bottom line: at current levels, any day that rates spend holding steady or moving microscopically lower will technically result in the lowest rates since October 28th. It would take a more noticeable improvement to break below that floor. When and if that happens, rates will be the lowest since early 2023. [thirtyyearmortgagerates]

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By 10am ET, today’s trading volume has already surpassed that seen on December 23rd and 26th (both full trading days)–proof positive that the market is shifting out of holiday mode. Over the past 3 weeks, bonds did a perfect job of holding inside the forgettable sideways range marked by 4.10-4.20 in 10yr yields. A breakout on either side of that range becomes a stronger possibility this week thanks not only to increased participation, but most importantly due to Friday’s jobs report. There are other relevant reports between now and then with Wednesday morning’s JOLTS/ISM combo being the most notable. Today’s ISM Manufacturing was slightly weaker but hasn’t had a big impact so far. Lastly, for those curious, both stocks and bonds have completely shrugged off the weekend’s news on Venezuela. 

Brinton joins the mortgage industry trade group after previously holding accounting leadership positions at a range of business organizations and nonprofits.