WTMS Blog Today = What’s up in Mortgage Today (PM) – 01/20/2026
Mortgage markets are reeling from an unprecedented geopolitical storm as President Trump’s Greenland tariff ultimatum sends bonds tumbling worldwide. The 10-year Treasury yield spiked to an overnight high of 4.312% before settling at 4.276%, while UMBS prices crashed nearly 3/8ths of a point. European allies are activating their “trade bazooka” anti-coercion measures, with Denmark’s pension fund already liquidating Treasury holdings.
This morning’s ADP weekly jobs report showed 8,000 new positions versus 11,750 the previous week, providing little relief to the broader market selloff. Japanese government bonds hit fresh record highs after Prime Minister Takaichi announced snap elections for February 8th, adding another layer of global uncertainty. The perfect storm of trade war fears and international bond liquidation is creating a toxic environment for mortgage originators.
Federal Reserve Chair Search Intensifies
Treasury Secretary Scott Bessent announced that Trump could name his Federal Reserve Chairman nominee as early as next week, with Kevin Warsh appearing to have the inside track. The Supreme Court will hear arguments Wednesday on Trump’s firing of Fed Governor Lisa Cook via social media, adding constitutional uncertainty to monetary policy. Fed officials enter their blackout period this week ahead of next week’s FOMC decision, which is widely expected to produce no change.
European Crisis Deepens
Trump escalated the transatlantic crisis by refusing to rule out military force to acquire Greenland, dismissing European “hysteria” over his tariff threats. European countries held emergency meetings over the weekend, with President Macron reportedly asking the EU to activate trade countermeasures that could block America’s access to EU markets. Several European nations are also considering withdrawing from the U.S.-led Civil-Military Coordination Center in Israel, further straining diplomatic relations.
Economic Data This Week
Tomorrow brings pending home sales and construction spending data, followed by PCE and Q3 GDP on Thursday. The shortened week concludes Friday with S&P Global PMI and University of Michigan consumer sentiment readings. With Fed officials in blackout mode, market focus shifts entirely to economic data and geopolitical developments.
Locking vs Floating
Risk aversion strongly favors locking today given the asymmetric risk environment facing bonds. While potential rallies would likely be modest and gradual, sell-offs could accelerate rapidly given the current geopolitical tensions. MBS fell 10 ticks by afternoon trading with the 10-year yield up over 6 basis points, suggesting mortgage rates will move higher for originators.
Current volatility and European bond liquidation fears make floating extremely dangerous for near-term closings.
Today’s Events
– ADP weekly jobs: 8k vs 11.25k previous
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.72 | -0.33 |
| 5.5 | 101.12 | -0.2 |
| 6.0 | 102.24 | -0.1 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.47 | -0.45 |
| 5.5 | 100.82 | -0.24 |
| 6.0 | 101.78 | -0.17 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.597 | 99.815 | 0.004 |
| 3 yr | 3.678 | 99.498 | 0.022 |
| 5 yr | 3.853 | 98.973 | 0.033 |
| 7 yr | 4.072 | 98.059 | 0.055 |
| 10 yr | 4.296 | 97.614 | 0.07 |
| 30 yr | 4.915 | 95.47 | 0.078 |
