WTMS Blog Today = What’s up in Mortgage Today (AM) – 01/12/2026
Markets are under pressure this morning as the Department of Justice escalated its attack on Fed independence with criminal investigation threats. Fed Chair Jerome Powell revealed Sunday that DOJ served grand jury subpoenas over building renovations, though Powell called it retaliation for setting rates “based on our best assessment of what will serve the public, rather than following the preferences of the President.” Stock futures dropped 0.5% while the dollar posted its biggest retreat since Christmas break. This political drama is creating uncertainty that mortgage originators need to watch closely.
The 10-year Treasury yield climbed to 4.19%, up 18 basis points from Friday’s close. UMBS 5.0 coupons fell 15 basis points to 100.35, reflecting the bond market’s reaction to Fed independence concerns. When political pressure threatens central bank autonomy, investors typically demand higher yields as a risk premium.
Gold rallied to new all-time highs as investors sought safe haven assets. Housing data showed continued weakness with December starts falling 4.6% monthly and 7.8% annually to 1.25 million units. Building permits declined 0.2% to 1.41 million units, down 1.1% year-over-year.
Housing completions plunged 15% annually to 1.39 million units. These numbers reflect the ongoing challenges facing the residential construction market. Trump’s proposed 10% cap on credit card interest rates is sending shockwaves through financial markets.
Major credit card companies like Citigroup, American Express, and Capital One retreated in early trading. Industry groups warned the cap would “reduce credit availability and be devastating for millions of American families.” This follows Trump’s $200 billion GSE mortgage bond purchase directive that helped drive rates lower on Friday.
Locking vs Floating
Current market conditions present significant risk for floating positions given the massive volatility from GSE buying announcements and Fed independence concerns.
Most lenders are at their lowest rates in years today, unless they repriced worse this afternoon. Elevated volatility should be expected as markets await more details on the GSE program. If the buying proceeds as planned, rates likely have more downside ahead, but any major changes could trigger a sharp snapback to higher levels.
Today’s Events
Treasury auctions include $58 billion 3-year notes and $39 billion reopened 10-year notes. Fed speakers today include Atlanta Fed President Bostic, Richmond Fed President Barkin, and New York Fed President Williams. Bank earnings season kicks off with major institutions reporting results starting Tuesday.
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.3 | -0.2 |
| 5.5 | 101.51 | -0.13 |
| 6.0 | 102.44 | -0.15 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.31 | 0.1 |
| 5.5 | 101.14 | -0.1 |
| 6.0 | 101.96 | -0.01 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.543 | 99.918 | 0.008 |
| 3 yr | 3.597 | 99.726 | 0.006 |
| 5 yr | 3.762 | 99.382 | 0.011 |
| 7 yr | 3.963 | 98.71 | 0.014 |
| 10 yr | 4.184 | 98.512 | 0.018 |
| 30 yr | 4.839 | 96.631 | 0.024 |
