Nice Rally on Data and Auction Results

Wednesday ended up being a straightforward session for bonds with a large CPI beat prompting a decently swift rally in the bond market. Shorter maturities did the best–also logical considering the proximity to the Fed Funds Rate and the fact that Fed rate expectations rallied 8+ bps. But longer maturities got a bit more love after a well-received 10yr Treasury auction at 1pm. Respectable results on a day where bonds are already rallying are all the more respectable.  With that, bonds hit new low yields for the day (MBS hit new highs) and neither strayed far after that.

Econ Data / Events

Core CPI m/m 

0.130 vs 0.3 f’cast, 0.2 prev

Core CPI y/y

2.8 vs 2.9 f’cast, 2.8 prev

Market Movement Recap

08:44 AM 10yr yields are down 3.7bps at 4.439 and MBS are up a quick quarter point.

01:03 PM Decent 10yr auction considering the AM rally.  Bonds improving slightly as a result.  10yr down 5.6bps at 4.42 and MBS up 11 ticks (.34).

04:01 PM Near best levels in final hour.  MBS up 3/8ths and 10yr down 6.1bps at 4.415

Heading into today’s CPI data, our stance was that we’d need to see the monthly core number come in at 0.1 vs 0.3 in order to see much of a friendly response, and that is exactly what’s playing out.  If markets weren’t taking inflation with a grain of salt at the moment, this would likely be worth a much bigger response.  As it stands, Fed Funds Futures didn’t even erase the spike seen after last Friday’s jobs report, and 10yr yields only dropped to 4.42 before bouncing–well short of the 4.39 pre-NFP levels.

Here in Tampa, I was walking through the hotel bar last night when I overheard someone say, “Age 60 might be the new 40, but 9:00 PM is the new midnight.” True dat. (There is also plenty of attention on the House Financial Services Committee advancing the Trigger Leads Bill.) Speaking of Florida, the state has certainly been subject to some dramatic business cycles over the last 100 years since the railroads helped populate the Sunshine State. ATTOM released its May 2025 U.S. Foreclosure Market Report, which shows there were a total of 35,498 U.S. properties with foreclosure filings, default notices, scheduled auctions, or bank repossessions, down 1 percent from a month ago but up 9 percent from a year ago: fewer starts but a continued rise in completed foreclosures. Delaware, Florida, and Illinois posted highest foreclosure rates. (Today’s podcast can be found here and this week’s are presented by Flyhomes, the leading wholesale lender for Buy Before You Sell solutions. Whether your borrowers run into DTI issues, need to unlock home equity for down payment, make a stronger, cash-like offer, or even move potentially with no cash out of pocket, Flyhomes provides a full suite of financial products to help them move forward, before selling their current home. Hear an interview with Flyhomes Dan Richards on the growing buy-before-you-sell (BBYS) market, with insights on the process, competitive advantages, wholesale focus, industry trends, and how brokers and consumers can get up to speed on this evolving home buying solution.)

Shelia Bair, who chaired the Federal Deposit Insurance Corp. from 2006 to 2011, said that while post-crisis reforms may have overregulated banks, the current deregulatory swing could undermine important protections and lead to another banking crisis.

A former senior accountant at CrossCountry Mortgage claims she was let go from her job three years prior because of her age.

Regulators’ decision to lift a seven-year-old cap on the size of the megabank’s balance sheet will produce benefits over the long haul, but it won’t result in any sudden gains, according to CFO Michael Santomassimo.

Cara Petersen, the Consumer Financial Protection Bureau’s top enforcement official, said the Trump administration has “no intention to enforce the law in any meaningful way.”

While lenders have come out with more products for the spring season, rate lock data finds buyers still hesitant to act because of high mortgage rates.

Although bonds are experiencing a small amount of volatility this morning, it isn’t consequential in the bigger picture.  Quick-but-modest weakness at 10:15am ET has essentially taken MBS back to unchanged levels.  10yr yields rose 2bps and are still almost 1bp lower. In the absence of relevant econ data, it falls to the Treasury auction and trade-related headlines to inform any bigger-picture momentum. As always, there’s a slightly better than random possibility of bond market weakness in the hours leading up to a Treasury auction.

“Why is Ireland so expensive? House prices are always Dublin’.” Those days are temporarily over in the United States, and the pendulum is quickly swinging to more inventory and price cuts in many places and price points. (If you’re wondering where your client can pick up an average home for cheap: Most Affordable U.S. Cities to Buy a Home for $300k or less.) Of all the major metro markets, Phoenix boasted the greatest number of listings with price cuts, at 31.3%, up more than 7 percentage points from the same period last year amid rising inventory. (The typical home in Phoenix costs $525,000, representing a drop of more than 3% from May 2024.) Here in Tampa, citizens saw the second-biggest share of discounted listings, at just below 30%. The median list price in the Sunshine State market stood at $417,500, having shed 1.6% compared with the same time last year. Coming in at No. 3, Denver had 29.4% of local home sellers slash prices on their properties last month. (Today’s podcast can be found here and this week’s are presented by Flyhomes, the leading wholesale lender for Buy Before You Sell solutions. Whether your borrowers run into DTI issues, need to unlock home equity for down payment, make a stronger, cash-like offer, or even move potentially with no cash out of pocket, Flyhomes provides a full suite of financial products to help them move forward, before selling their current home. Hear an interview with LoanLogics’ Roby Robertson on the proliferation of the non-QM mortgage market, examining its key growth drivers, borrower trends, technological advancements, and how lenders are navigating risk and compliance amid shifting economic conditions.)