A new move that would open up more use of certain dedicated savings accounts for home purchase purposes is under consideration, according to Politico.

But a senior administration official said the DOJ, not Pulte, is behind the subpoena that relates to Powell’s congressional testimony about Fed building renovations.

The survey, taken before Pres. Trump’s $200 billion MBS buy demand, finds panelists worried over inflation, but also see employment as the larger downside risk.

Nearly half of all credit card users carry a balance, according to Academy Bank. Higher non-mortgage debt levels can affect home loan underwriting.

Federal Reserve Chair Jerome Powell said the central bank has been served grand jury subpoenas and been threatened with criminal indictment, moves he called “pretexts” to influence interest rates through “political pressure or intimidation.”

Mortgage rates are either higher or lower today, depending on the lender in question. Some lenders raised rates on Friday afternoon in response to weakness in the bond market (lenders set rates based on the trading levels of MBS, the bonds that underlie the mortgage market). Those lenders are actually slightly lower today. Lenders who didn’t raise rates on Friday afternoon are slightly higher today. In all cases, apart from Friday morning, today’s rates remain well below anything seen for nearly 3 years. This is notable considering 10yr are near 4 month highs and more than 0.20% higher than the lower end of the range during that time. One reason for mortgage rates outperforming the 10yr Treasury is the fact that the 10yr isn’t always the best indicator for mortgages. In recent years, a 5yr Treasury has behaved more like mortgage rates in terms of day to day movement.  An even bigger reason for mortgage outperformance is last week’s announcement regarding Fannie/Freddie purchases of MBS.  This is the news that sent rates surging lower on Friday.  The market is continuing to hone in on a new trading range for MBS today, but the bulk of the initial volatility seems to have passed.

Incidental Weakness Ahead of CPI Data

Bonds were marginally weaker on Monday with no obvious scapegoats in sight. Some reporters pointed toward Fed Chair Powell’s criminal inquiry as rattling the market, but bonds were effectively unchanged in the 1pm hour after a well-received 10yr Treasury auction.  More importantly, there was no clear correlation between the overnight news and the overnight market movement. Volume was the lowest in several days–typical for a data-free Monday. MBS underperformed, but only because they’re still range-finding after last week’s massive outperformance. Tomorrow morning’s trading deserves much more focus than anything seen today. CPI will be out at 8:30am ET and it is expected to be a more tradeable installment of the data compared to the last release (which proved to be questionable due to data collection constraints surrounding the shutdown/reopening timeline).

Market Movement Recap

08:54 AM Moderately weaker overnight but holding inside the range. 10yr up 1.9bps at 4.19. MBS down an eighth of a point.

11:56 AM No reaction to 3yr Treasury auction.  10yr up less than 1bp at 4.18 and MBS down just over an eighth of a point.

02:49 PM MBS down 9 ticks (.28) and 10yr up 1.5bps at 4.186

The most important-sounding news over the weekend was last night’s subpoena of Fed Chair Powell over statements made to congress regarding the Fed’s building renovations. Bond yields were slightly higher this morning and commentators erroneously connected those dots. There was actually no meaningful movement in either direction when the news hit, but trading volume confirms the news was noticed.

Forex markets also confirmed a reaction with the dollar losing obvious ground vs the Euro, but Treasury futures weren’t well-correlated with that move.  The following chart shows the percent change in EUR/USD and 10yr futures prices (note for the keen observers, the y-axis is inverted such that a lower orange line means lower bond yields and a lower blue line means a weaker dollar).

Weakness crept in gradually in the overnight session and about half of it has been erased in early trading. The net effect is a bond market that continues to operate in the same old range, albeit close to the weaker boundary.

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Home prices are now something Americans can wager on. Polymarket partnered with Parcl to offer prediction markets tied to housing price indices.