Mortgage rates ended last week at the lowest levels in just over a month. It was the 3rd best day in over a year and the 24th best day in over 3 years. The other 23 days weren’t too much lower either. The only difference today is a microscopic improvement that makes it the 2nd best day in over a year. In other words, we’re hanging out near 3 year lows with minimal volatility. In order to see sharper, more sustained momentum, we’d likely need the government shutdown to end. That would allow the most consequential economic reports (like the jobs report) to be released. It would also allow data collection to resume for future jobs reports. Between now and then, there is other data to guide the rate market, but it’s just not as heavy hitting. This week is particularly light in that regard, but there’s one exception. The BLS received an exception to compile September’s CPI inflation data, to be released this Friday. It’s not quite on par with the jobs report, but it can certainly get rates moving (for better or worse, depending on the details).

Strange Combo of Excitement and Boredom

Boring stuff first: there was no significant data, news, volume, or volatility today. Bonds gained modest ground early and then held mostly sideways through the 3pm CME close. In that sense, it was just like most other days during the government shutdown (and quite a few even before the shutdown). The excitement is entirely due to outright levels. It was the second best close for 10yr yields in over a year and the 2nd best for 2yr yields in over 3 years (a reflection of the rate cut outlook). 

Market Movement Recap

10:24 AM Slightly weaker overnight, but now stronger after 8:20am rally.  10yr down 1.6bps at 3.994 and MBS up 3 ticks (.09)

01:58 PM Flat all day so far.  MBS up 3 ticks (.09) and 10yr down 1.9bps at 3.99

03:58 PM Heading out near best levels.  MBS up an eighth and 10yr down 2.7bps at 3.981

New week. Same grind. We’re waiting (likely for a good while longer) for the government shutdown to end before the most relevant econ data can truly exert influence on the bond market in the big picture. On the plus side, the trading in the interim has erred on the bullish side thanks to the available non-gov data and anxiety over trade tensions. So far this morning, bonds have rallied at the 8:20am CME open which is just something that can happen serendipitously due to trader positioning and is not tied to any underlying motivation in news/data.
NOTE: the Conference Board’s leading indicator index is not being published today. They are citing the shutdown as the reason even though they are not a government agency. 

Transunion will offer the credit scoring model for $4 in 2026, following previous moves made by VantageScore partners Experian and Equifax.

Regulators also accused Southern California-based E Mortgage of failing to properly supervise remote employees and cooperate with their examinations.

Approximately three years after the one-time non-depository bought Roscoe (Texas) State Bank, Cornerstone Capital Bancorp agreed to purchase Peoples Bancorp.

Flagstar shareholders approved a plan to merge its holding company into the bank; Huntington tapped a new chief auditor, along with two new business leaders; First Foundation hired a new chief credit officer; and more in this week’s banking news roundup.

Solve stages an acquisition, Intercontinental Exchange partners on new indices, Optimal Blue adds updates and Incenter offers a CRA loan trading platform.

While borrowing activity increased from a year ago, seasonal patterns and economic concerns suggest near-term slowing, the Mortgage Bankers Association said.

Logical Pull-Back on Tamer Tariff Talk, But Mortgages Outperform

If there was only one event to be aware of on Friday, it was a Trump comment around 7:10am ET in which The President said that the recently-announced 100% tariff on China was probably not sustainable. Stocks, bond yields, and volumes spiked instantly and nothing much happened for the rest of the day. Fortunately for the bigger picture, Thursday’s mid-day drama caused a big enough bond rally that Friday’s pull-back only managed to erode about half the gains. The news is even better for mortgage rates. Lenders had a big enough cushion from Thursday’s volatility that Friday’s pull-back merely resulted in rates holding steady on average. That means the average lender is fairly close to September’s lows which are close enough to the lowest rates in 3+ years.

Econ Data / Events

NY Fed Manufacturing 

10.7 vs -1.0 f’cast, -8.7 prev

Market Movement Recap

10:51 AM Slightly weaker overnight.  MBS down an eighth and 10yr up 4.1bps at 4.011

02:20 PM Slight recovery, but mostly flat all day.  MBS down 1 tick (.03) and 10yr up 3.1bps at 4.00