The FHFA announced that Fannie and Freddie will remove ‘certain’ homeowners insurance requirements which may reduce costs. But what are people saying about where their industry-facing priorities are? Both are focused on leveraging technology and reminding lenders of their existing products. For example, Fannie offers a construction to perm program, as does Freddie Mac, and has “MH Advantage” for manufactured homes; Freddie has something similar. Both have the problem of educating the market about their products. Undisclosed debt and occupancy fraud are still issues, and appraisal automation and moving to UAD 3.6 are big deals. Both have very good ARM prices for the first time in a business cycle… ever? Certainly our industry goes through business cycles, and on today’s The Big Picture at 3PM ET Bill Cosgrove, CEO of Union Home Mortgage, discusses leadership through changing market cycles, maintaining discipline, managing margins, and positioning lenders to stay competitive as the market evolves. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Ocrolus. Ocrolus is transforming the mortgage industry with AI-powered data and analytics, featuring cutting-edge tools for automated indexing, income analysis, and now automated conditioning. Ocrolus helps mortgage teams move at the speed of automation with the precision of human oversight. Hear an interview with Storable’s Holly Fiorello on how mortgage rate “lock-in” is reshaping housing mobility, borrower expectations, workforce relocation, and the future of homeownership, while examining whether new lending products could unlock significant pent-up housing demand.)

At almost any moment in March 2026, a glance at the “10yr vs oil price” chart has revealed sufficient correlation to blame the bond rout on the energy price spiral. But the correlation is spotty at times and today is one of the starkest examples. Oil is essentially flat while bonds surged to higher yields overnight. We don’t normally focus much on 2yr Treasuries, but the selling there is much worse than in the 10yr, reflecting a rapidly changing outlook for the Fed Funds Rate. Indeed the odds of a rate HIKE (not cut) in April rose from just over 4% to just over 10% this morning. The big shifts in the 2s vs 10s yield curve speak to the same phenomenon. Oil prices and econ data are easily being drowned out by this large scale repositioning for “higher for longer” short-term rates. 

Federal Reserve Chair Jerome Powell, in a post-FOMC meeting Wednesday, said he intends to stay at his post until a successor has been confirmed, adding that he will remain on the Fed board until a Justice Department investigation into him is concluded.

The delay in its shareholder meeting to approve the sale to UWM Holdings could put Two Harbors back in play, but will it get the same price from another buyer?

Accounting rules on loan lock timing helped drag down nonbank mortgage profits, the Mortgage Bankers Association said.

President Trump’s executive order on mortgage credit calls on federal agencies to ease the path for eNotes, digital mortgages and remote notary, something lenders have been wrestling with for years.

Fannie Mae and Freddie Mac’s single-family updates include some roof coverage options somewhat similar to what’s used in one of their other divisions.

Mortgage rates got hit 3 times on Wednesday, with the net effect being a move back up to the highest levels in several months. The average lender isn’t quite as high as they were last Friday, but after late-day “reprices” many are fairly close.  The least of the bond market’s concerns (bonds dictate rates) was this morning’s inflation data. The Producer Price Index (PPI) was higher than expected on multiple fronts, including those that translate directly to higher consumer prices in the more robust PCE inflation data that comes out on April 9th. Higher inflation = higher rates, all else equal.  Inflation also figured into the morning’s other development: a renewed surge in oil prices. Granted, it’s not as big as some of the recent spikes, but as crude jumped roughly $6 per barrel, bond yields followed with a strong correlation. The 3rd market mover was also inflation-related, but this time in the form of Fed comments. Fed Chair Powell’s characterization of inflation progress left the market feeling hopeless regarding potential rate cuts any time soon. As always, it is the market’s rate cut expectations that actually correlate with interest rate movement (whereas actual Fed rate cuts are old news by the time they happen).  Today’s post-Fed press conference resulted in financial markets moving expectations for the next rate cut out to April of 2027. A day ago, the market saw no chance of a rate HIKE at the next Fed meeting. Today, it’s nearly 5% (not high, but a notable shift nonetheless).

Bonds Weren’t Prepared For Fed’s Inflation Fears

If anything, you’d think the market would have been pricing in a hawkish Fed day, given the run up in energy prices. But Powell threw reporters a curve ball during the press conference and instead placed the focus on other categories of inflation that were under the microscope before the energy price spike (like core goods and non-housing services), saying there’d been less progress than hoped. The takeaway was that rate cuts are on hold for the foreseeable future. The market agrees, as it is now pricing the next rate cut at more than a year in the future. Bonds were already losing ground on oil price spikes (and PPI to a lesser extent). The net effect took yields back near recent highs and hit MBS for almost half a point.

Econ Data / Events

Core PPI m/m (Feb)

0.5% vs 0.3% f’cast, 0.8% prev

Core PPI y/y (Feb)

3.9% vs 3.7% f’cast, 3.6% prev

PPI m/m (Feb)

0.7% vs 0.3% f’cast, 0.5% prev

PPI y/y (Feb)

3.4% vs 2.9% f’cast, 2.9% prev

Market Movement Recap

08:32 AM Slightly weaker after PPI data. MBS unchanged after being up a few ticks and 10yr up .8bps at 4.207

09:16 AM additional weakness with oil prices spiking.  10yr up 2.8bps at 4.227 and MBS down more than an eighth of a point

02:12 PM modestly stronger after Fed announcement. MBS still down 3 ticks (.09) and 10yr up 1.5bps at 4.214

02:57 PM MBS are now down 9 ticks (.28) and 10yr up 5.3bps at 4.253

04:13 PM Weakest levels. MBS down nearly half a point and 10yr up 6.6bps at 4.266

A Federal Housing Finance Agency report suggests it should have more authority over companies that work with Fannie Mae and Freddie Mac.