WTMS Blog Today = What’s up in Mortgage Today (AM) – 11/21/2025

Bond markets opened stronger this morning, tracking overnight stock losses as traders positioned ahead of key Fed communications. NY Fed President Williams sent shockwaves through markets by signaling he sees room for a December rate cut, boosting MBS prices by just over an eighth. The 10-year Treasury yield dropped 2.6 basis points to 4.059%, providing immediate relief for mortgage originators.

Consumer sentiment data crushed expectations, falling to one of the lowest levels on record at 51.0. Williams’ comments are particularly significant since he historically aligns closely with Chair Powell’s thinking. Market pricing for a December Fed cut jumped from 45% to 65% probability following his speech, creating the strongest bond rally we’ve seen in weeks.

This shift in Fed expectations could finally give mortgage rates the downward momentum originators have been waiting for. The timing comes as existing home sales posted their eighth straight month of gains, suggesting pent-up demand remains strong. September’s delayed jobs report delivered mixed signals that muddied December rate cut expectations before Williams spoke.

Payrolls added 119k versus 50k forecasted, but unemployment ticked up to 4.4% – the highest since 2021. The labor market cooling narrative continues to build, supporting the Fed’s dovish pivot. Philly Fed business conditions improved more than expected, though price pressures remain elevated.

Locking vs Floating

Current market dynamics favor floating for loans closing beyond 30 days, especially after Williams’ dovish comments shifted Fed expectations. The September jobs report passed without challenging key technical levels, suggesting limited downside risk in the near term. However, Thanksgiving week volatility could create irrational price swings due to thin liquidity and rescheduled economic data.

Risk-reward ratios have shifted more favorably toward floating, but be prepared for potential whipsaws.

Today’s Events

Non Farm Payrolls (Sep): 119K vs 50K forecast, 22K previous
Participation Rate (Sep): 62.4% vs 62.3% previous
Philly Fed Business Index (Nov): -1.7 vs -3.1 forecast, -12.8 previous
Philly Fed Prices Paid (Nov): 56.10 vs 49.20 previous
Unemployment rate mm (Sep): 4.4% vs 4.3% forecast, 4.3% previous

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.49 | 0.16 |
| 5.5 | 101 | 0.11 |
| 6.0 | 102.2 | 0.04 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.55 | 0.07 |
| 5.5 | 100.77 | 0 |
| 6.0 | 101.72 | 0.02 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.504 | 99.992 | -0.031 |
| 3 yr | 3.497 | 100.009 | -0.03 |
| 5 yr | 3.617 | 100.038 | -0.031 |
| 7 yr | 3.812 | 99.624 | -0.03 |
| 10 yr | 4.063 | 99.484 | -0.021 |
| 30 yr | 4.711 | 98.634 | -0.014 |