WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/16/2025

Block trading activity dominated the morning, sending UMBS prices lower despite a relatively light economic calendar. The 30-year UMBS 5.0 coupon dropped to 99.70, down 2 basis points as institutional investors made large transactions. This afternoon’s pricing has made rates slightly more expensive for borrowers across all loan programs.

The government shutdown delayed several key economic reports that traders typically watch for market direction. Only the Philadelphia Fed manufacturing index was released, showing a surprising jump to 10.7 versus the expected -1.0 forecast. However, the real market mover was the wave of block trades that hit just after 9 AM, pushing Treasury yields higher.

Federal Reserve Policy Outlook

Fed Governor Christopher Waller signaled continued support for quarter-point rate cuts during Thursday interviews. He emphasized a cautious approach, saying officials should “go carefully and do 25, wait and see what happens.” This contrasts with Fed Governor Stephen Miran, who continues pushing for larger half-point cuts due to trade tensions with China. Market expectations now point to three 25-basis-point cuts through year-end.

Treasury Secretary Scott Bessent has narrowed the Fed Chair candidates to five people, with Waller considered a top contender to replace Jerome Powell next year.

Locking vs Floating

Current market conditions favor locking for risk-averse clients given rates are at multi-week lows. The biggest threats come from unexpected headline shocks rather than scheduled economic data due to the government shutdown.

Risk-tolerant borrowers may wait for additional negative volatility, but with the 10-year Treasury rejecting the 4.0% level again, upward pressure on rates remains the primary concern.

Today’s Events

– NY Fed Manufacturing: 10.7 vs -1.0 forecast, -8.7 previous
– NAHB Housing Market Index (delayed due to shutdown)

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.7 | -0.02 |
| 5.5 | 101.1 | 0.01 |
| 6.0 | 102.26 | 0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.75 | -0.18 |
| 5.5 | 100.91 | -0.02 |
| 6.0 | 101.86 | -0.06 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.489 | 100.021 | -0.012 |
| 3 yr | 3.493 | 100.02 | -0.008 |
| 5 yr | 3.616 | 100.041 | -0.004 |
| 7 yr | 3.803 | 100.442 | 0 |
| 10 yr | 4.03 | 101.795 | 0.001 |
| 30 yr | 4.627 | 101.979 | 0.008 |