WTMS Blog Today = What’s up in Mortgage Today (AM) – 01/13/2026
December’s inflation data delivered a modest surprise that’s already moving mortgage markets. Core CPI came in at 0.2% monthly versus 0.3% expected, with the annual rate dropping to 2.6% from forecasts of 2.7%. This cooler-than-expected reading sent bonds rallying immediately after the 8:30 AM release.
UMBS prices jumped over a quarter point within minutes of the data. The 10-year Treasury yield dropped nearly 2 basis points to 4.163%, creating immediate pricing relief for originators. While the moves have been choppy, the initial reaction suggests mortgage rates could see modest improvement today.
The headline inflation numbers met expectations at 0.3% monthly and 2.7% annually. However, markets focused on the core reading which excludes volatile food and energy components that the Federal Reserve watches closely. This data helps confirm that inflation remains roughly stable after recent government shutdown complications affected previous measurements.
President Trump’s recent call for GSEs to buy $200 billion in MBS continues to support lower coupon bonds. Agency MBS saw mixed performance yesterday with lower coupons outperforming while higher coupons faced pressure from refinancing concerns. Today’s CPI data could extend that trend if rates continue moving lower.
Locking vs Floating
Mortgage rates held steady over the weekend before today’s CPI-driven volatility. Price correlation between MBS and Treasuries continues normalizing after recent disruptions. Tuesday’s event risk around inflation data created the two-way volatility we expected, with this release having better potential to impact rates than recent reports.
Consider floating if you have longer closing timelines as today’s data supports continued rate improvement. However, remember that volatility works both directions and additional economic releases could reverse these gains.
Today’s Events
– 8:30 AM: Monthly Core CPI 0.2% vs 0.3% forecast
– 8:30 AM: Monthly Headline CPI 0.3% vs 0.3% forecast
– 8:30 AM: Annual Core CPI 2.6% vs 2.7% forecast
– 8:30 AM: Annual Headline CPI 2.7% vs 2.7% forecast
– 1:00 PM: 30-Year Bond Auction
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.11 | 0.14 |
| 5.5 | 101.34 | 0.14 |
| 6.0 | 102.41 | 0.01 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.09 | 0.05 |
| 5.5 | 101.04 | 0.02 |
| 6.0 | 102.09 | 0.02 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.528 | 99.946 | -0.009 |
| 3 yr | 3.588 | 99.752 | -0.005 |
| 5 yr | 3.747 | 99.447 | -0.014 |
| 7 yr | 3.949 | 98.792 | -0.013 |
| 10 yr | 4.176 | 98.576 | -0.003 |
| 30 yr | 4.836 | 96.677 | 0.008 |
