The Supreme Court’s decision seems to set limits on Pres. Trump’s power, even if he wasn’t inclined to hold on to the GSEs to control mortgage rates, BTIG said.

An appellate court denied the bank’s argument targeting the state’s Foreclosure Abuse Prevention Act and ordered it to pay the defendant’s legal fees.

Markets were bracing for the chaos of a regional war; banks may be the target of sophisticated cyberattacks, experts warn.

This year 40 companies had what it takes to land on the Best Mortgage Companies to Work For list.

War headlines failed to lift Treasuries; rates sold off, resistance held, and hedging beat rate bets, according to the Head of Correspondent Business Development at AD Mortgage.

Big Bad Day For Bonds. What’s Next?

Bonds sold off early and aggressively on Monday in a move that most onlookers are quickly attributing to geopolitics. Specifically, the thought is that higher oil prices imply higher inflation and, thus, higher rates. While some traders probably woke up and decided to sell bonds based on this logic, they didn’t account for the pace of the sell-off. Rather, it was a perfect storm of timing and technicals with Friday’s month-end positioning leaving bonds overbought and well through the 4% technical floor. Today ran the risk of being a selling day anyway, but the obvious goal of re-entering the 4%+ range made it that much more swift. Closing out at 4.04% doesn’t seem too bad in the bigger picture. It’s a hard reset in the short term, but not necessarily a sign of additional momentum. For that, this week’s econ data would need to gang up and send a bullish message for the economy.

Econ Data / Events

ISM Manufacturing Employment (Feb)

48.8 vs — f’cast, 48.1 prev

ISM Manufacturing PMI (Feb)

52.4 vs 51.8 f’cast, 52.6 prev

ISM Mfg Prices Paid (Feb)

70.5 vs 59.5 f’cast, 59.0 prev

Market Movement Recap

09:08 AM Mostly flat overnight with sharper selling starting at 7am. 10yr up 5.9bps at 4.009 and MBS down just over a quarter point.

10:04 AM a bit more weakness after ISM data. MBS down 10 ticks (.31) and 10yr up 8.8bps at 4.036

11:40 AM New lows with MBS down 3/8ths and 10yr up 10.3bps at 4.051

03:30 PM MBS still down 3/8ths and 10yr up 9.9bps at 4.046

Spoiler alert: it’s not Iran. And this morning’s yields are the 2nd lowest in more than 3 months behind last Friday. Last Friday was also a month-end trading day with a mini snowball rally that defied overt explanation (apart from “month end bond buying”)–a fact that led us to warn about the risk of “new month bond selling.”  It’s not that bonds always rally at month-end or sell off when the new month begins, but if there’s a sharp, inexplicable move on the last day of any given month, the risks of a reversal increase on the first day of the following month. Geopolitical headlines may cause modest volatility here and there, but bonds’ correlation with oil prices is not a reliable analytical focus.

The next chart shows what oil and bond yields had been doing on the last 3 days of last week.  Notice the extreme absence of correlation.

Here’s the move so far today–the one that has people concluding that bond yields are higher because oil is higher.  In fact, versus the 3pm CME close on Friday, bonds were flat until 7am.  By that time, oil had already experienced almost all its volatility for the day.  The crux of the bond sell-off played out in a vacuum–STRONGLY suggesting Friday’s yields were dragged down by month-end buying and this morning’s selling is “new month” positioning. 

In what seems to be the blink of an eye we’re down two months of 2026, and by most accounts they were decent for lenders and vendors. Here in Ft. Lauderdale at the Lenders One Summit, the talk in the hallways, like that at several recent conferences, is centered around a handful of topics, M&A being one of them, and the desire for companies to control the “funnel.” STRATMOR’s Garth Graham, who resides nearby, last night told me that STRATMOR has a full complement of buyers and sellers and we discussed the Rocket/Compass deal and its relation to the Rocket/Redfin deal. Will the 80-basis point “spiff” motivate brokers to move business away from other leader wholesalers? The United States and Israel attacking Iran is certainly a topic, and along those lines the “disappearance” of the traditional “flight to quality” when something like this happens. Types of production are also a favorite topic at conferences, and I received this note. “Rob, my team and I have only done a handful of ‘mainstream’ loans in the last several months. We’re doing more private money loans than ever before, more non-Agency, and deals that take several months. Are you hearing this from others? Absolutely. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Feewise, which turns mortgage compliance from bottleneck to business accelerator. Handle all the complexities involved with establishing TRID compliant fees and disclosures, achieve sign off, and deliver packages to your consumers for review or signature. Hear an interview with FirstClose’s Andria Lightfoot on modernizing processes with low-lift digital entry points to eliminate bottlenecks, boost borrower satisfaction, and stay competitive in the evolving home equity market.)

Mortgage rates began the new week with a fairly quick jump back into the low 6% range (top tier 30yr fixed rate for the average lender). With the news cycle very focused on developments in Iran, most coverage attempts to correlate geopolitical events with market movement. The only legitimate way to do this would be to say that upward pressure on oil prices is translating to higher inflation implications and therefore higher rates. At many times in the past, this would be a solid conclusion. To some small extent, a case could even be made for this correlation accounting for a portion of today’s weakness. But most of the big, directional moves in oil prices over the past 2 days have failed to correlated with big moves in the bond market.  Even when we zoom out to wider frames of reference, we see counterintuitive developments over the past several years. When oil peaked around $120/bbl in 2022, 10yr Treasury yields were around 3%. When oil fell sharply into 2023, bond yields continued moving up and have held flat for the last few years even as oil gently declined. Nonetheless, there are also pockets of correlation where we can see the two lines moving in the same direction. The only problem with that is that oil and rates can both respond to a third variable: economic strength. On that note, this week’s economic data may be just as big of an influence on rate momentum while geopolitical developments represent a wild card that can create a backdrop of volatility.

MBS numbers at both soared in January, when Trump directed the enterprises to accumulate more bonds, but a decline in loans shrunk Freddie’s total number.