Bonds came into the domestic session in weaker territory after steady selling in Europe.  The resulting yields were ultimately a few bps higher than the nearest technical ceiling in the 10yr (4.34), which is also the lower boundary of a “gap” created by the big overnight rally on February 25th. Technicians could view this movement two ways. On one hand, a break above the technical ceiling could cause concern about additional selling.  Conversely, a move back into a gap could be viewed as a cue to buy again. Interestingly enough, bonds began rallying right at the official start of the domestic session.  Is this enough to conclude that the “fill the gap” crowd is in charge?  Probably not. In a sideways range, the typical pattern involves 1-3 days of gains followed by 1-3 days of weakness.  This is still a generally sideways market that’s waiting for more serious motivation.

Acting Comptroller Rodney Hood discussed using fintech to evaluate self-employed borrowers’ creditworthiness, saying alternative credit models could promote financial inclusion.

Officials in the Trump administration have floated the idea of changing how the government measures economic growth. Economists say the shift would create new expenses for banks.

Bostic now sees price growth returning to the Fed’s 2% goal at some point in early 2027.

Trade groups representing banks and utilities urged lawmakers to reauthorize the CISA law before it expires in September.

The new name Cotality, along with its latest tag line, reflects its role in serving and uniting the entire property ecosystem, company executives said.

Yields Pushing Range Boundaries After Tariff Updates and Econ Data

Bonds lost ground over the weekend as news of tariff exclusions fueled a stock rally.  A modest recovery was underway when the S&P Services PMI came out stronger.  From that point on, bonds were on the back foot, ultimately hitting their weakest levels in the afternoon.  Incidentally, this brings 10yr yields right in line with the ceiling of the recent range. Today’s video discusses the implications of a potential range breakout, which can mean different things for different people. 

Econ Data / Events

S&P Services PMI

54.3 vs  50.8 f’cast, 51.0 prev

Market Movement Recap

09:32 AM Moderately weaker over the weekend, but recovering somewhat now.  MBS down an eighth and 10yr up 3.5bps at 4.289

09:56 AM Some additional weakness after PMI data.  MBS down nearly a quarter point and 10yr up 6bps at 4.316

02:20 PM 10yr yields are up nearly 8bps at 4.333 and MBS are down nearly 3/8ths after hawkish comments from Fed’s Bostic (but not obviously because of Bostic, necessarily).

03:48 PM Little changed from previous update and flat since then.  MBS down 11 ticks (.34) and 10yr up 7.9bps at 4.334

Wall Street is weighing in on the possible fate of home loan giants Fannie Mae and Freddie Mac, after a fleeting suggestion by Treasury Secretary Scott Bessent earlier this week that the government’s stakes could eventually become part of the proposed US sovereign wealth fund.

Over 100,000 loans for first-time home buyers have been pooled and securitized in issuances this year, the guarantor of government-backed loans said.

Effective March 18, the department is retracting eligibility for non-citizens, it announced.