WTMS Blog Today = What’s up in Mortgage Today (AM) – 10/30/2025

Federal Reserve Chair Powell just delivered a reality check that sent mortgage-backed securities tumbling this morning. The market’s overwhelming confidence in a December rate cut got a cold splash of water yesterday, and we’re seeing the hangover effects right now. UMBS pricing dropped another 4 basis points overnight as traders recalibrate their expectations.

The Fed did cut rates by 25 basis points as expected, bringing the federal funds rate to a 3.75-4.00% range. However, Powell deliberately avoided signaling whether another cut would follow in December, even though markets were nearly 100% certain just days ago. This uncertainty is creating volatility that directly impacts your rate sheets today.

Corporate Earnings Paint Mixed Picture

Freddie Mac reported net income of $2.8 billion for Q3 2025, down 11% year-over-year due to credit reserve builds versus releases in the prior year. More encouraging was Redwood Trust’s record $6.8 billion in cumulative loan production across their platforms. Their mortgage banking revenues hit the highest levels since Q3 2021, signaling strength in the non-agency space.

Capital allocated to Redwood’s mortgage banking operations jumped 84% since Q2 2024. This massive increase reflects growing investor appetite for non-QM and jumbo loan products. For originators, this suggests continued strong execution options for loans that don’t fit agency boxes.

Treasury Markets Reset Higher

The 10-year Treasury yield climbed to 4.088% this morning, up 13 basis points from yesterday’s close. This move higher in benchmark rates explains why mortgage pricing is under pressure despite the Fed cut. When Treasury yields rise, mortgage rates typically follow within 24-48 hours.

The Fed also announced it will end quantitative tightening on December 1st. Going forward, they’ll reinvest maturing agency securities into Treasury bills rather than new MBS purchases. This policy shift removes a consistent buyer from the mortgage-backed securities market, potentially keeping upward pressure on mortgage rates.

Today’s Events

– 9:55 AM: Fed Governor Bowman Speech
– 1:15 PM: Fed Dallas President Logan Speech

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |

MBS
| Security | Price | Change |
|———-|——-|———|
| 30YR UMBS 5.0 | 99.58 | -0.04 |
| 30YR UMBS 5.5 | 101.09 | -0.01 |
| 30YR GNMA 5.0 | 99.72 | -0.01 |
| 15YR UMBS-15 5.0 | 101.08 | +0.04 |

US Treasuries
| Maturity | Yield | Change |
|———-|——-|———|
| 10 YR | 4.088% | +0.016% |
| 2 YR | 3.614% | +0.018% |
| 30 YR | 4.632% | +0.009% |
| 5 YR | 3.724% | +0.014% |

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