The new tool taps into Intercontinental Exchange’s AllRegs database, which contains over a million pages of guidelines from various sources.

More government-backed loans shifted out of forbearance, while the share of portfolio and private-label securities loans remained flat from December.

Federal Reserve Gov. Michelle Bowman — who is viewed as a leading contender to be the next vice chair for supervision at the central bank — said changes to the post-financial crisis framework should be a focal point of the Fed’s regulatory policy review.

Builder confidence had surged following Trump’s election win but home financing costs stuck around 7% in recent months have sapped demand and sent builder stocks tumbling.

Bonds Give Up Friday’s Gains

Bond market volume was a little better than half of its recent average today–something that’s not  shocking to see on the return from a 3 day weekend without any big ticket economic data. Overseas markets contributed to a weaker bias out of the gate, and while that stabilized in early U.S. trading, selling was slow, steady, and linear from 11am through the close.  With that, yields find themselves back in the range that has contained a majority of the trading of the past 3 weeks (4.50 to 4.57).

Econ Data / Events

NY Fed Manufacturing 

5.7 vs -1.0 f’cast, -12.6 prev

NAHB Housing Market Index

42 vs 47 f’cast, 47 prev

Market Movement Recap

09:11 AM Moderately weaker overnight with MBS down 6 ticks (.19) and 10yr up 4.4bps at 4.52

01:08 PM 10yr up 6 bps at 4.536.  MBS down 6 ticks (.16)

03:02 PM 10yr yields are up 6.7 bps at 4.543 and MBS down roughly 1/8th from highs (quarter point on the day).

Mortgage lenders were unable to update their rates yesterday as the bond market was closed for the Presidents Day holiday.  Three day weekends can occasionally result in extra volatility on the first day of the new week because–in many cases–the rest of the world’s financial markets continue moving. This leaves the US bond market (which is responsible for dictating interest rates) with the need to cover 2 days worth of ground.  In today’s case, that ground led toward higher rates both yesterday and today. The net effect was a return to the rates just a hair below those seen last Thursday, thus erasing most of Friday’s gains.  The silver lining is that Thursday’s rates were already near the lowest in just under 2 months.

This weekend I spent a little time in the Miami Airport and overheard two people discussing how they were waiting for a builder in Tennessee to finish their home… And hoping rates didn’t go higher. I remained mum. No one knows exactly where rates will go, but I can guarantee you that initial jobless claims for several Thursdays to come will be wonky given government firings. (Lenders are also concerned about the regulatory landscape, and Regulation Central, today at 3PM ET, will explore the whirlwind of leadership turnover at the CFPB, with four directors in just 30 days. As Jonathan McKernan steps in, what direction will the agency take?) In a holiday- and data-light week, investors will be focusing on the January housing data for the U.S., including housing starts on Wednesday and existing home sales on Friday. Zelman reports that, “Unlike 2024, this year’s spring selling season is not off to an early start. While both homebuilder sentiment and orders demonstrated a modest seasonal uplift in January, the magnitude of this increase was underwhelming, representing the smallest January increase recorded in our survey history across both metrics.” (Today’s podcast can be found here and this week’s is sponsored by nCino. nCino Mortgage Suite’s three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Hear an interview with Rocket’s Bill Emerson on leading both individuals and a company through the digital age of mortgage.)

Traders have done a reasonably good job of making it back to the office after the 3-day weekend. Volumes are almost in line with last Tuesday (also a day without any big ticket economic data in the morning). On the other hand, last Tuesday’s volumes were the lowest in over a month. 
All that to say: it’s a slow day so far.  As always, lighter participation means that it’s easier for traders to push yields around if there’s a buyer/seller imbalance. Today’s imbalance favored sellers who spent the overnight session following Europe toward higher yields.  The domestic session has been extremely flat, with yields well inside the only semblance of a recent trading range (4.50-4.57 in 10yr yields).

MBS are starting the day down around an eighth of a point (-0-04), as if they were adding a calmer, more linear day of gains onto last Thursday. 

The Trump administration has installed Jeffrey Clark at the Consumer Financial Protection Bureau. Clark, a former environmental lawyer in the Justice Department in the first Trump administration, was indicted as part of the president’s efforts to overturn the 2020 election.

U.S. District Judge Amy Berman Jackson agreed to temporarily block the Trump administration from firing more CPFB employees and said the White House could not delete or destroy any of the bureau’s data or databases.