WTMS Blog Today = What’s up in Mortgage Today (PM) – 01/12/2026

Stocks tumbled this afternoon after the Department of Justice served Federal Reserve Chair Jerome Powell with subpoenas over building renovations. But this criminal investigation isn’t really about construction contracts. Powell made it clear that prosecutors are targeting the Fed’s independence in setting rates based on economic data rather than presidential preferences.

Markets are getting tired of Trump’s intervention in financial systems. First came the $200 billion MBS purchase announcement from Fannie and Freddie that drove mortgage rates below 6% for the first time in three years. Now there’s a proposed 10% cap on credit card interest rates that sent banking stocks plummeting.

The 10-year Treasury yield climbed 30 basis points to 4.19% as investors fled to safety assets. Gold hit new all-time highs while the dollar posted its biggest retreat since Christmas. UMBS securities fell across all coupons, with the 5.0 dropping 20 basis points to 100.30.

Housing data showed continued weakness as December job growth disappointed at just 50,000 new positions. Housing starts fell 4.6% month-over-month to 1.25 million units, well below the expected 1.33 million. Consumer sentiment improved slightly, but inflation expectations rose from 3.2% to 3.4% for the long term.

Locking vs Floating

This week presents exceptional volatility following the GSE MBS buying announcement and subsequent political drama. Most lenders are at their lowest rates in years, though some repriced worse this afternoon. Elevated volatility should be expected as markets await more details on the government’s mortgage bond purchasing plan.

If the $200 billion buying program proceeds as announced, rates likely have more downside potential ahead. However, any major changes to the plan could trigger a rapid snapback to higher rates. Lender pricing strategies will vary significantly during this uncertain period.

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 |