Dugan is replacing Rich Gagliano, who is moving to executive chairman after 18 months in charge of the now stand-alone mortgage technology provider.

The Senate Banking Committee considered the nomination of Paul Atkins to lead the Securities and Exchange Commission, whose track record on deregulation in the lead up to the 2008 financial crisis was questioned by Democratic lawmakers. Lawmakers also considered the nomination of Jonathan Gould to lead the Office of the Comptroller of the Currency and Luke Pettit for a key bank regulatory role at Treasury.

Uneventful Drift Ahead of Friday’s Monthly PCE Data

For the 3rd day in a row, the bond market logged a rather uneventful trading session ending with minimal change versus the previous trading day.  All this despite the presence of several economic reports and Treasury auctions. If there was any reaction to this morning’s data, it was slightly bond-friendly, but not enough to say it was anything other than random. The 7yr auction was a non-event, and stocks failed to offer any of the recent sort of spillover that has frequently made its way into the bond market. From here, the week’s last big chance/risk of volatility is Friday morning’s monthly PCE data.

Econ Data / Events

Jobless Claims

224k vs 225k f’cast, 225k prev

Continued Claims

1856k vs 1890k f’cast, 1881k prev

GDP Revision (Q4)

2.4 vs 2.3 prev

Market Movement Recap

09:06 AM Weaker overnight but improving after data.  MBS up 1 tick (.03) and 10yr up half a bp at 4.358.

01:04 PM No major reaction to 7yr auction.  MBS down 1 tick (.03) and 10yr up 1.6bps at 4.368

03:21 PM Sideways still.  MBS down 1 tick (0.03) and 10yr up 2.1bps at 4.374

In a paper, former central bank researchers make the case that the Federal Reserve could better support the Treasury market from disruptions in the cash-futures basis trade by hedging its asset purchases.

The company turned to automation to address pain points it found in working with lines of credit that mortgage lenders are increasingly originating.

FHFA director Pulte called these programs inappropriate for regulated entities, which are in government conservatorship, but said others are still able to offer them.

The Consumer Financial Protection Bureau asked a federal judge to vacate and set aside a settlement against a Chicago mortgage lender, accusing the CFPB of misconduct in a case brought under former Director Kathy Kraninger, a Trump appointee.

The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency took a measured approach to developing the international capital standards, according to a Government Accountability Office report.

Narrow Trading, Weaker Drift; MBS Live Threads Intro

Bonds began the day in weaker territory but found a bit on the latest tariff headlines (bad for stocks, good for bonds).  As has been typical of tariff headline reactions, the movement wasn’t big and it didn’t last long.  A ho-hum 5yr Treasury auction paved the way for one last attempt at gains, but bonds gave up in the PM hours with both MBS and Treasuries drifting to their weakest levels of the day.  That said, the range is still narrow and nothing of major consequence transpired today.  In other news, today’s video recap has an introduction to a new MBS Live feature: Threads! 

Econ Data / Events

Durable Goods

0.9 vs -1.0 f’cast, 3.3 prev

Market Movement Recap

09:59 AM Weaker overnight, but flat in early trading.  MBS down 2 ticks (.06) and 10yr up 2.5bps at 4.342

12:54 PM Some mid-day recovery on tariff headlines (probably).  MBS down only 1 tick (0.03) and 10yr up 2.2bps at 4.339

04:09 PM Heading out near weakest levels.  MBS down an eighth and 10yr up 3.1bps at 4.348

It depends what one’s definition of “recent” is, but if it involves the past few weeks, mortgage rates were at their highest recent levels both yesterday and today.  2 other days in that window were worse, but only microscopically.  On a positive note, the entirety of the past few weeks has seen rates calmly holding a narrow range at the lowest average level since early October 2024.   If it’s not already clear, today did nothing to change the prevailing trend, even though the underlying bond market suggested rates should move higher.  As we discussed yesterday, bonds can say one thing and mortgage rates can do something else depending on the time of day and the pace of market movement.  Today was just another example as the bond market movement that suggested higher rates happened too late in the day for most lenders to react.  The tacit implication is that rates will be slightly higher tomorrow if the bond market remains in the same territory between now and tomorrow morning.