WTMS Blog Today = What’s up in Mortgage Today (AM) – 10/09/2025

Markets opened with steady weakness as the government shutdown continues to disrupt economic data flow. The 30-year UMBS 5.0 coupon dropped 19 basis points to 99.27, while 10-year yields climbed 23 basis points to 4.141%. This selling pressure is creating headwinds for mortgage originators trying to compete on rate.

The shutdown has delayed jobless claims and wholesale inventories, leaving bonds without their usual Thursday morning catalysts. Fed Chair Powell is speaking today, though his remarks are pre-recorded and won’t address monetary policy. The only significant event remains the 1 PM 30-year bond auction, which could set the tone for the remainder of the session.

Yesterday’s September FOMC minutes revealed a more hawkish Fed than expected, with several participants favoring no rate cuts at all. The committee expressed concern that tariff-driven inflation could accelerate, though current readings suggest a modest increase from 2.8% to 3.1%. Most participants still support further rate cuts through year-end, but the debate signals growing caution about monetary easing.

A major legal development hit the mortgage industry as Optimal Blue and nearly 30 lenders face an antitrust lawsuit alleging price collusion. The suit claims these lenders’ spreads were 49.2% higher than competitors, contributing to a 54% surge in mortgage payments from 2022 to 2025. While the mortgage banking industry remains highly competitive, this litigation could impact pricing transparency tools going forward.

Locking vs Floating
The risk-reward equation for lock-float decisions remains muted during the shutdown. Risk-tolerant borrowers continue waiting for the delayed jobs report, provided bonds don’t lose significant ground before then. Current weakness keeps 5.0 coupons down 19 basis points with 10-year yields climbing 26 basis points to 4.143%.

Today’s Events
No economic data due to government shutdown
– 1:00 PM: 30-Year Bond Auction

Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.28 | -0.18 |
| 5.5 | 100.88 | -0.13 |
| 6.0 | 102.2 | -0.03 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.48 | -0.17 |
| 5.5 | 100.84 | 0.01 |
| 6.0 | 101.69 | -0.04 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.598 | 99.813 | 0.016 |
| 3 yr | 3.614 | 99.327 | 0.017 |
| 5 yr | 3.738 | 99.49 | 0.02 |
| 7 yr | 3.924 | 99.703 | 0.021 |
| 10 yr | 4.141 | 100.887 | 0.023 |
| 30 yr | 4.726 | 100.381 | 0.016 |