President Donald Trump said he would impose tariffs on a wide range of imports, including oil and metals, in the coming months, expanding his plans to enact sweeping trade levies well beyond those set to hit China, Canada and Mexico on Saturday.

The Federal Home Loan Bank called the transition to special policy advisor a joint decision between the executive and board as new reviews in Washington start.

Close to 88% of all homeowners reported staying in the same home year-over-year compared to 85.1% reported a decade ago, per U.S. Census data.

The regulator has a projected fiscal year 2025 budget of $810 million, according to a nonpartisan analysis.

The Trump administration’s Office of Personnel Management sent a memo of frequently asked questions encouraging civil servants to go on vacation and even take a second job, which in some instances is contrary to longstanding agency conflict-of-interest rules.

Here in Las Vegas, I asked a German girl if Germans are afraid of numbers. She said 9. Numbers are interesting, as we will find out with the declared Trump tariffs on Canada and Mexico. Do you know the difference between an American roulette wheel and a European wheel? The American version has “00.” Fans of Lucifer and numerology know that, for both, the numbers add up to 666. Like other disasters in Lahaina or the Carolinas, builders have some interesting numerical perspectives on how the “Black Swan event” of the LA County fires will impact housing stock, the permit process, and the ability to rebuild. Three thousand miles away, in Maryland, due to state government lenders are pulling out and local banks no longer lending, the latest example being PHH Correspondent: “PHH will no longer accept new locks for our Non-Agency products in the state of Maryland.” More below on yet another example of how entwined government is with lending, and how the stroke of a pen can negatively impact borrowers, lenders, and vendors. (Today’s podcast can be found here and this week’s is sponsored by Figure. 50 percent of the top IMB’s use them, and if you haven’t examined your HELOC & HELOAN strategy recently, it’s time to get on it. Hear an interview with CloudVirga’s Jessica Evett on consumers’ level of satisfaction with the mortgage process and their expectation of technology and AI throughout the process.) Broker and Banker Products, Software, and Services

This morning’s PCE inflation data was in line with expectations with the annual core PCE price index coming in at 2.8% and the monthly core coming in at 0.2%.  The initial reaction was weaker, possibly because the 0.2% monthly number is not low enough to suggest a quick return to the 2.0% annual target. As traders digested the data, the unrounded numbers were a bit friendlier, prompting a reversal back toward stronger levels. Comments from Fed’s Goolsbee helped as well. The initial selling pressure and subsequent bounce back leave bonds at unchanged levels heading into the PM hours. Potential tariff announcements could cause an additional move in either direction depending on timing and details. The start date is now said to be March 1st instead of Feb 1st.

For all of the news that seems to be highly likely to cause volatility for rates, the market reaction ended up playing out on a very small scale. The biggest day of movement was Monday, with rates opening moderately lower versus the previous week after the big AI-driven stock sell-off pushed some investors into the bond market (when traders buy more bonds, rates move lower, all other things being equal). The second half of the week featured a Fed announcement and multiple headlines surrounding big, new tariffs on Mexico, Canada, and China. To be fair, the bond market definitely reacted to those headlines, and some mortgage lenders ended up being forced to raise rates a bit on Friday afternoon.  But in the bigger picture, the volatility is a non-event so far. It will take months, if not years to fully analyze the impact from whatever tariffs are ultimately implemented. 2019, which saw rates move lower despite a trade war with China, may or may not prove to be a relevant precedent. Either way, it’s a reminder that tariffs don’t necessarily have one obvious implication for rates, even if the market reacts that way at first.  Either way, this round of tariffs is still up in the air in terms of particulars.  Based on potential legal challenges and likely exemptions, markets won’t jump too far to conclusions until details are known and the data is showing the impacts.

Reasonably Reserved Reaction to Tariff Headlines

If you were just watching headlines and making note of MBS Live alerts, it may have seemed like today’s tariff news was a big deal for rates. And while tariffs definitely hit harder than this morning’s PCE data, bonds are nonetheless heading out the door with only modest losses on the day, no losses for the month, and solid gains on the week.  Today’s video discusses the inherent uncertainties surrounding tariffs, not only with respect to legal implementation, but also the precedent of market impacts (focusing on the 2019 trade war). Granted, things could certainly be different this time, but we won’t really know for sure any time soon.

Econ Data / Events

Core PCE, MM

0.2 vs 0.2 f’cast, 0.1 prev
Unrounded 0.16

Core PCE, YY

2.8 vs 2.8 f’cast, 2.8 prev

Employment Cost Index

0.9 vs 0.9 f’cast, 0.8 prev

Market Movement Recap

08:42 AM Flat overnight and initially weaker after data, but stabilizing now.  MBS down 2 ticks (.06) and 10yr up 1.3bps at 4.531.  Possibly some influence from Fed’s Bowman comments on Monetary Policy not exerting pressure on economy. 

01:14 PM MBS now back to unchanged.  10yr up only half a bp at 4.52

02:07 PM Back to weakest levels after tariff announcement.  MBS down 3 ticks (.09) and 10yr up 2.3bps at 4.539

02:57 PM Additional selling. MBS down 7 ticks (.22) and 10yr up 5.1bps at 4.566

04:58 PM Off the weakest levels heading into the close.  MBS down only and eighth and 10yr up only 2.8bps at 4.543

The financial services unit also made a categorization change that revised comparisons to prior periods and will be working with its REIT affiliate in new ways.