WTMS Blog Today = What’s up in Mortgage Today (AM) – 10/14/2025

Bond markets delivered a genuinely strong start this morning, despite some red flashes on trading screens. The 30-year UMBS 5.0 coupon opened at 99.55, which is significantly better than Friday’s end-of-session levels around 99.50. This marks one of the few times traders can confidently say we have a “strong red start.”

The 10-year Treasury yield dropped to the mid-4.03% range after closing Friday above 4.05%.

This improvement comes despite Friday’s brief 10-minute rally that provided little sustained momentum. Treasury yields falling as investors seek safety amid fresh trade tensions with China. Fed Chair Jerome Powell will speak at 12:20 PM ET today, delivering remarks alongside Vice Chair Bowman and Governor Waller.

Markets eagerly await any signals about future rate cuts, especially as the government shutdown continues limiting economic data availability. Small business optimism fell to 98.8 in September, missing expectations of 100.5. JPMorgan kicked off earnings season with mixed results for mortgage originators.

The bank’s mortgage origination volume rose 15% year-over-year to $13.9 billion, but provisions for credit losses jumped 19% quarter-over-quarter. CEO Jamie Dimon cited concerns about tariffs, trade uncertainty, and sticky inflation creating heightened uncertainty for the economy. The ongoing government shutdown continues impacting data flow, though September’s Consumer Price Index will be released October 24.

This timing ensures the Federal Reserve has updated inflation data for its month-end meeting. Market expectations remain for 25 basis point cuts at each of the two remaining FOMC meetings this year.

Locking vs Floating

Friday’s massive volatility raises obvious questions about whether to lock or float this week.

Simply expecting continued improvement because bonds surged on tariff developments represents faulty thinking. Tariffs have historically been a double-edged sword for bonds, creating extra risk of correction as traders potentially buy the stock market dip. Big, lasting momentum in bond markets requires significant changes in economic data, not just tariff headlines.

While further improvements could happen, there’s nothing from Friday’s action that makes this more likely than a reversal. MBS prices help with intraday risk management, but 10-year yield levels provide better insight into bigger-picture bond market momentum.

Today’s Events

– 6:00 AM: September NFIB Business Optimism Index
– 12:20 PM: Fed Chair Powell Speech

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.56 | -0.03 |
| 5.5 | 101.01 | 0.01 |
| 6.0 | 102.23 | 0 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.67 | -0.08 |
| 5.5 | 100.79 | -0.15 |
| 6.0 | 101.76 | -0.01 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.503 | 99.995 | -0.025 |
| 3 yr | 3.509 | 99.622 | -0.002 |
| 5 yr | 3.629 | 99.981 | 0.003 |
| 7 yr | 3.819 | 100.343 | -0.019 |
| 10 yr | 4.047 | 101.66 | 0.013 |
| 30 yr | 4.641 | 101.752 | 0.002 |