WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/23/2025

Mortgage markets are testing originators’ patience as we inch closer to Friday’s highly anticipated inflation data release. The 10-year Treasury yield climbed 4.8 basis points to hover just under 4.00%, while UMBS 5.0 coupons shed 19 ticks to close at 99.76. Oil prices surged 5.5% on news of new Russian sanctions, reigniting inflation concerns that could complicate the Fed’s rate-cutting plans.

Despite the modest selling pressure, bond traders remain relatively calm heading into tomorrow’s Consumer Price Index report. The data, delayed by the government shutdown, represents the first major economic release since officials began signaling their focus on employment over inflation. Economists expect core CPI to maintain its 0.3% monthly pace, keeping annual inflation at 3.1%.

Federal Reserve officials are widely expected to cut rates again at next week’s meeting despite persistent inflation above their 2% target. The fragile labor market continues to drive policy discussions, with employment data carrying more weight than price pressures in current Fed deliberations. JPMorgan analysts see a 65% chance stocks advance after Friday’s CPI release, suggesting markets won’t be derailed by elevated inflation readings.

The selling that began overnight was gradual and measured, leaving yields still well below recent highs. MBS Live noted that while today’s weakness doesn’t reach traditional alert thresholds, the departure from morning price stability was notably abrupt. Some reactive lenders may reprice for the worse in similar scenarios, making afternoon rate locks potentially more expensive.