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Mortgage Today (AM) - 03/19/26

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March 19, 2026

WTMS Blog Today = What's up in Mortgage Today (AM) - 03/19/2026 Fed Holds, Market Freaks The Federal Reserve held rates steady at 3.50 to 3.75 percent yesterday while Chair Powell acknowledged rising energy prices will add near-term inflationary pressure, pushing rate-cut expectations further into the future. Updated dot plot projections showed a modestly more inflationary outlook with a growing share of policymakers expecting just one cut this year or none at all. The Fed remains firmly in wait-and-see mode as it balances sticky inflation against a gradually cooling economy. Powell's measured tone avoided signaling any urgency, reinforcing the "higher for longer" narrative that's now rattling markets. Odds of an April rate hike jumped from 4 percent to over 10 percent this morning, reflecting how dramatically sentiment has shifted. Bonds Ignore Oil, Focus on Rate Repricing UMBS prices dropped another 12 to 26 basis points overnight while the 10-year Treasury yield climbed to 4.31 percent, continuing Wednesday's selloff after a hotter-than-expected PPI report. Throughout March, the "10-year versus oil price" chart has shown enough correlation to blame the bond rout on surging energy costs, but today oil traded flat while bonds sold off hard. The 2-year Treasury took the worst hit with yields surging to 3.92 percent, reflecting a rapidly changing outlook for Fed Funds. This large-scale repositioning for higher short-term rates is drowning out both oil price movements and economic data. The market is repricing risk around sticky inflation and a stagflationary mix that keeps sentiment deeply cautious. Energy Attacks Fuel Stagflation Fears Global stocks extended losses as Brent crude climbed toward $113 per barrel following attacks on critical Middle East energy infrastructure, pushing oil gains since the conflict began past 55 percent. Saudi Arabia reported a drone strike on its Samref refinery after Israel hit Iran's South Pars gas field, with Iran retaliating against Qatar's largest LNG export plant. European natural gas jumped as much as 35 percent while European equities fell 2.1 percent to their lowest level this year. Higher fuel and diesel costs are filtering through transportation channels into consumer prices, with history suggesting these effects linger even after energy shocks fade. President Trump called on Israel and Iran to stop attacking energy infrastructure, but the risk of lasting damage continues to escalate. Jobs Data and Manufacturing Beat Expectations Weekly jobless claims fell 8,000 to 205,000 versus the 215,000 forecast, while continuing claims rose slightly to 1.857 million for the week ending March 7. The Philadelphia Fed Business Index surged to 18.1, crushing the forecast of 10.0 and up from 16.3 previously. More concerning for inflation hawks, the Philly Fed Prices Paid component jumped to 44.70 from 38.90, signaling accelerating input costs for manufacturers. The labor market remains resilient with the four-week moving average for claims at just 210,750. These stronger-than-expected figures reinforce the Fed's cautious stance and support the case for keeping rates higher for longer. Global Central Banks Stay Unanimous The Bank of England and Bank of Japan both held rates unchanged Thursday, following the Fed's lead and signaling that the Middle East conflict has clouded the policy outlook. UK policymakers voted unanimously to hold with all members standing "ready to act" to contain inflation, sending 2-year gilt yields up 28 basis points to 4.38 percent, the highest since January 2025. Traders are now fully pricing in two rate hikes by both the European Central Bank and Bank of England this year, a dramatic reversal from recent expectations. The ECB announces its decision later today after Swiss and Swedish policymakers also held steady. Money markets now see just a 40 percent chance of a quarter-point Fed cut this year, down from 55 percent yesterday. Mortgage Markets Brace for More Volatility Agency MBS prices worsened another 12 to 25 basis points today with all coupons under pressure as the repricing continues. The 2-year versus 10-year yield curve shifts reflect investors repositioning for an extended period of elevated short-term rates. Today's calendar includes delayed new home sales data for January, wholesale inventories, Treasury announcing month-end supply totaling $211 billion across multiple maturities, and a $19 billion reopened 10-year TIPS auction. The toxic mix of geopolitics, sticky inflation, and hawkish central bank messaging has mortgage originators in full risk-off mode. With March shaping up as a one-way trade for bonds punctuated by brief corrective moments, the dust needs to settle before anyone takes major risks with float strategies. Locking vs Floating The Fed's reaction added more volatility than expected to an already turbulent environment driven by geopolitical uncertainty and the energy price collapse. All of March has been essentially a one-way losing trade for bonds with only a few small corrective bounces. Risks remain elevated as the market reprices rate expectations higher while oil-driven inflation concerns mount. The recommendation is to continue waiting for the dust to definitively settle before taking any major risks with floating, as the current environment favors defensive positioning and locking strategies. Today's Events Jobless Claims (Mar 14): 205K vs 215K forecast, 213K prior Continued Claims (Mar 7): 1,857K vs 1,850K forecast, 1,850K prior Philly Fed Business Index (Mar): 18.1 vs 10.0 forecast, 16.3 prior Philly Fed Prices Paid (Mar): 44.70 vs 38.90 prior New Home Sales (Jan): 0.72M forecast, 0.745M prior Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.81 | -0.12 | | 5.5 | 100.58 | -0.11 | | 5.0 | 99.18 | -0.06 | GNMA 30 yr | Coupon | Price | Intra-Day Change | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.847 | 99.338 | 0.077 | | 3 yr | 3.842 | 99.039 | 0.066 | | 5 yr | 3.92 | 99.237 | 0.043 | | 7 yr | 4.091 | 99.453 | 0.032 | | 10 yr | 4.282 | 97.728 | 0.021 | | 30 yr | 4.866 | 96.212 | -0.017 | Market Data

Mortgage Today (PM) - 03/18/26

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March 18, 2026

# WTMS Blog Today = What's up in Mortgage Today (PM) - 03/18/2026 Oil spikes and inflation data shattered any optimism in the mortgage market Wednesday, sending rates back toward recent highs and crushing refinance demand. The 30-year fixed rate jumped to 6.30% last week, the highest level of 2026, driving a 19% week-over-week drop in refinance applications. The culprit was a double hit from the ongoing U.S.-Israel war with Iran and a hotter-than-expected Producer Price Index report showing wholesale inflation surged 0.7% in February, well above the 0.3% forecast. Purchase applications managed a 1% gain and remain 12% above last year's levels, offering a thin silver lining as the spring buying season approaches. But with oil prices now topping $108 per barrel after Israeli strikes on Iran's South Pars gas field, the outlook for mortgage rates in the near term has darkened considerably. Fed Holds Steady, Signals No Relief Coming The Federal Reserve held rates steady in the 3.50%-3.75% range Wednesday, projecting only one rate cut for all of 2026 despite mounting economic uncertainty from the Iran conflict. The Fed's updated economic projections showed inflation ending 2026 at 2.7%, higher than the 2.4% forecast in December, as policymakers acknowledged the oil shock could keep price pressures elevated. Chair Jerome Powell's press conference proved more hawkish than markets anticipated, with Powell emphasizing disappointing progress on core goods and non-housing services inflation beyond the energy spike. Fed Governor Stephen Miran continued his dissent streak, voting for an immediate rate cut, but the broader committee stayed unified in its cautious stance. Markets responded by pushing expectations for the next rate cut beyond a year out, a dramatic shift from earlier projections of multiple cuts in 2026. Oil Shock Drives Market Volatility Crude oil prices exploded higher Wednesday after Iran's Revolutionary Guards threatened retaliatory strikes on energy facilities across Saudi Arabia, the UAE, and Qatar following the Israeli attack on Iran's Pars gas field. Brent crude surged past $108 per barrel while West Texas Intermediate climbed above $98, widening the discount to Brent to levels not seen since 2019. The conflict has effectively shut down the Strait of Hormuz, which handles 20% of global oil and LNG supply, with total Middle East output cuts estimated at 7 to 10 million barrels per day. U.S. gasoline prices have now risen roughly 28% since the war began, hitting $3.84 per gallon and approaching levels that historically trigger consumer spending pullbacks. The Trump administration announced a 60-day Jones Act waiver to allow foreign vessels to move fuel between U.S. ports, but supply relief remains limited with Iraqi production still at only one-third of pre-crisis levels. Bond Market Suffers Worst Day in Weeks Treasury yields jumped to near recent highs as bonds sold off sharply following the PPI data and Powell's hawkish commentary. The 10-year Treasury yield rose 6.3 basis points to 4.261%, while the 2-year climbed 9.7 basis points to 3.771% as traders repriced rate cut expectations. UMBS prices fell nearly half a point, with the 5.0 coupon dropping 0.45 to 98.93, triggering negative reprice warnings from lenders in afternoon trading. The yield curve continued flattening for a third straight session, with the 2-year to 10-year spread narrowing to under 50 basis points, the flattest since late November. Volume and volatility were surprisingly muted during the Fed announcement itself, but picked up dramatically during Powell's press conference when he shifted focus away from energy prices to underlying inflation concerns. CFPB Wins Funding Fight in Federal Court A federal judge ruled Wednesday that the Consumer Financial Protection Bureau must continue drawing its funding from the Federal Reserve, rejecting acting director Russell Vought's legal argument that the agency couldn't access funds unless the Fed was profitable. Vought, who publicly stated he was working to "close down the agency," had stopped requesting Fed funds and instead sought congressional appropriations, which the judge called "arbitrary, capricious and in violation of law." The ruling came after three nonprofits that rely on CFPB lending data sued, arguing the funding cutoff would effectively shut down the agency and eliminate access to fair lending data. The decision ensures the CFPB can continue operations for now, though the broader political battle over the agency's future remains unresolved. The mortgage industry has watched the CFPB funding fight closely, as the agency's regulations touch nearly every aspect of residential lending. Housing Market Shows Mixed Signals Pending home sales rose 1.8% in February, beating expectations and offering a rare bright spot in an otherwise gloomy housing picture. But the data reflects contracts signed before the Iran war began and mortgage rates jumped, raising questions about whether the momentum can continue. Homebuilder sentiment ticked up one point to 38 in March but remains below the 50 break-even mark for the 23rd straight month, with nearly two-thirds of builders offering sales incentives and 37% cutting prices. Foreclosure filings are rising while affordability pressures intensify as tariffs squeeze material costs, immigration enforcement thins the construction labor pool, and now energy prices threaten to push overall inflation higher. The mortgage market faces a challenging spring season with rates moving in the wrong direction just as inventory typically increases. Locking vs Floating The Fed's hawkish stance and renewed volatility from geopolitical uncertainty make floating risky in the near term. Rates have generally moved one direction throughout March with only brief corrective moments, and the addition of Fed commentary emphasizing persistent inflation concerns beyond oil adds to upward pressure. With energy prices still climbing and the market now pricing no rate cuts until late 2027, waiting for a definitive market turn before taking floating risks appears prudent. The Fed's reaction added more volatility than expected to an already volatile environment dominated by the ongoing Iran conflict. Today's Events - Core PPI m/m (Feb): 0.5% vs 0.3% forecast, 0.8% prior - Core PPI y/y (Feb): 3.9% vs 3.7% forecast, 3.6% prior - PPI m/m (Feb): 0.7% vs 0.3% forecast, 0.5% prior - PPI y/y (Feb): 3.4% vs 2.9% forecast, 2.9% prior - FOMC Economic Projections - Fed Interest Rate Decision: 3.75% (unchanged) - Fed Press Conference Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.93 | -0.45 | | 5.5 | 100.69 | -0.25 | | 5.0 | 99.24 | -0.2 | GNMA 30 yr | Coupon | Price | Intra-Day Change | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.771 | 99.483 | 0.097 | | 3 yr | 3.777 | 99.222 | 0.099 | | 5 yr | 3.877 | 99.429 | 0.09 | | 7 yr | 4.058 | 99.648 | 0.079 | | 10 yr | 4.261 | 97.893 | 0.063 | | 30 yr | 4.884 | 95.95 | 0.041 | Market Data

Mortgage Today (AM) - 03/18/26

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March 18, 2026

WTMS Blog Today = What's up in Mortgage Today (AM) - 03/18/2026 Markets are grinding through a sleepy pre-Fed day with modest gains across mortgage-backed securities despite disappointing manufacturing data. UMBS 30-year coupons posted small gains with the 5.5 coupon up 9 basis points, while GNMA securities showed even stronger performance with the 5.0 coupon climbing 24 basis points. The 10-year Treasury yield held relatively steady at 4.197%, down just 2 basis points intraday, as traders position defensively ahead of this afternoon's Federal Reserve announcement. Refinance demand collapsed last week, plunging 19% overall and 27% for conventional refinances as the 30-year fixed rate spiked to 6.30% from 6.19% the prior week. Geopolitical tensions surrounding the Iran conflict drove oil prices higher and rattled Treasury markets, pushing rates to their highest levels in weeks. Purchase applications managed a modest 1% gain and remain 12% above last year's levels, offering a sliver of optimism as the spring buying season approaches. Rates have edged slightly lower to start this week, but volatility remains elevated with all eyes on Fed Chair Powell's commentary later today. The NY Fed manufacturing index came in at -0.2 versus a forecast of 3.2 and well below the prior reading of 7.1, signaling continued weakness in the manufacturing sector. This disappointing data initially provided modest support for bonds, though the market remains hesitant to make significant moves ahead of the Fed meeting. While no rate cut is expected today, Powell's tone regarding inflation concerns and the geopolitical risk premium could determine whether recent rate weakness continues or if we see renewed pressure. The manufacturing decline adds to concerns about tariff impacts on materials costs and supply chain disruptions affecting homebuilders. A federal judge delivered a significant ruling for mortgage originators who rely on CFPB data and oversight, ordering the agency to continue drawing funding from the Federal Reserve. Acting director Russell Vought had attempted to effectively shutter the agency by arguing it couldn't receive funding unless the Fed was profitable, a move the judge called "arbitrary, capricious and in violation of law." Three nonprofits sued after the funding cutoff threatened to eliminate critical lending data used to track fair lending practices and compliance metrics that many lenders depend on for regulatory monitoring. Homebuilder sentiment inched up one point to 38 in March but remains below the critical 50 break-even threshold for the 23rd consecutive month, reflecting ongoing affordability challenges. Nearly two-thirds of builders continue offering sales incentives while 37% are cutting prices with average discounts holding at 6%, creating potential opportunities for purchase loan volume. Tariffs on materials and appliances are squeezing builder margins while immigration enforcement at construction sites has thinned the available labor pool, driving up costs. NAHB Chief Economist Robert Dietz noted that down-payment hurdles and uncertainty from the Iran conflict will act as headwinds, though recent executive orders aimed at reducing regulatory burdens could eventually help increase attainable housing supply. NAR reported pending home sales rose 1.8% in February, offering another modestly positive data point for purchase mortgage volume heading into spring. Meanwhile, Freedom Mortgage's parent company struck a deal to acquire Seneca Mortgage Servicing, expanding their MSR platform as servicing rights continue to attract investor interest in a high-rate environment. On the real estate side, Zillow launched "Zillow Preview," allowing brokerages to share listings publicly before they hit the MLS through a direct entry system that bypasses traditional MLS workflows, potentially changing how quickly purchase opportunities reach borrowers. Locking vs Floating Volatility risk remains elevated due to ongoing geopolitical uncertainty, with the entire month of March proving bearish for rates. Market participants should maintain a defensive posture until the bearish trend clearly levels off, which will require more than two positive days given the false hope created by brief rallies on March 6th and 9th. With the Fed announcement looming this afternoon and rate momentum still negative, locking makes sense for loans closing within the next 15-30 days. Today's Events - NY Fed Manufacturing Index: -0.2 vs 3.2 forecast, 7.1 previous - 2:00 PM: FOMC Rate Decision (no change expected) - 2:30 PM: Fed Chair Powell Press Conference Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | GNMA 30 yr | Coupon | Price | Intra-Day Change | Treasuries | Term | Yield | Price | Intra-Day Yield Change | UMBS 30 yr | Coupon | Price | Intra-Day Change | | 4.5 | 97.44 | 0.06 | | 5.0 | 99.41 | 0.03 | | 5.5 | 101.03 | 0.09 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 4.5 | 97.39 | 0.1 | | 5.0 | 99.67 | 0.24 | | 5.5 | 100.83 | 0.19 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.695 | 99.627 | 0.02 | | 3 yr | 3.693 | 99.456 | 0.016 | | 5 yr | 3.793 | 99.805 | -0.001 | | 7 yr | 3.98 | 100.121 | -0.001 | | 10 yr | 4.197 | 98.405 | -0.002 | | 30 yr | 4.834 | 96.713 | -0.009 | Subscribe free at WellThatMakesSense.com to get this analysis in your inbox daily. Market Data

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