The banking sector has stabilized significantly since the spring of 2023, but elevated interest rates have created lingering issues on bank balance sheets.

The Trump administration could announce a pathway for tariff relief on Mexican and Canadian goods covered by North America’s free trade agreement as soon as tomorrow, Commerce Secretary Howard Lutnick said Tuesday.

The credit score simulator only uses the Classic FICO scorecards available at each of the repositories, not the most up-to-date version, FICO 10T.

Easing regulations on the GSEs will likely drive elevated activity in non-QM if or when it occurs, leaders at the real estate investment trust also said.

Some argue that “March 4th” is the only date that is also a command (march forth), while others disagree and say that any date in March is also a command. Some things aren’t always clear. In a more important matter, U.S. Commerce Secretary Howard Lutnick said he would strip out government spending from the gross domestic product (GDP) report, but gave no indication how soon this change might happen, while dismissing fears of a possible recession. Treasury Secretary Scott Bessent is confident that inflation will reach the Federal Reserve’s 2 percent target. “I would expect that very quickly we will be down to the Fed’s 2 percent target,” Bessent said. “So, I’m expecting inflation to continue dropping over the year.” Investors are increasingly positioning against the dollar, citing signs of a cooling US economy and potential damage from President Donald Trump’s tariff plans. While the dollar recently surged following tariff announcements, market expectations for Federal Reserve rate cuts have grown, diminishing the dollar’s appeal. Meanwhile, lenders are continuing to look at technology, and today’s 2PM ET Advisory Angle with the STRATMOR Group focuses on AI: All Aboard the AI Train: A Practical Roadmap for Lenders. (Today’s podcast can be found here and sponsored by Floify. Floify is an easy-to-configure point-of-sale platform that allows each branch or loan officer to customize its look and feel to meet the needs of their lending team, homebuyers, and market. Hear an interview with HomeVision’s Vincent Chu on how AI-driven underwriting solutions can be both effective and safe for lenders.)

Although mortgage rates are based on bonds, and although bonds are constantly on the move throughout the day, mortgage lenders prefer to set the day’s rates only once. From there, if bonds make enough of a fuss, lenders will issue mid-day changes for better or worse. Today was a bit of a roller coaster, which is not surprising considering the extent to which stocks and bonds have been correlated recently. Stocks took a dive early in the day and bond yields (aka rates) followed. This allowed the average lender to set the lowest 30yr fixed mortgage rates since mid October. As the day progressed, stocks and bonds bounced back in the other direction and the move was big enough for most mortgage lenders to reprice back toward slightly higher rates.  The bad news is that we’re no longer at the lowest level in 4 months, but the good news is that we’re still a hair lower than yesterday (or any other day since December 8th. 

Winning Streak Finally Ends, But it Could Have Been Worse

Take yesterday out of the equation and today’s closing levels are better than any other day since early December.  That’s not a bad way to conclude 9 days in a row of bonds making intraday improvements. In the absence of data, traders took cues from equities and technicals. On the technical note, 10yr yields bounced at 4.11 right at the start of the overnight session and again in the 10am hour.  Yields retraced most of yesterday afternoon’s rally in concert with a stock market bounce.  Days like today become much more likely than not when bonds stretch winning streaks to 8 days or more. This could be a simple attempt to catch a breath, but the jury’s out until we see the rest of the week’s data and whether or not yields actually care about 4.11%. 

Market Movement Recap

09:59 AM Moderately stronger overnight and holding.  MBS up 1 tick (.03) and 10yr down 1.3bps at 4.142

12:26 PM weakest levels.  10yr up 2.2bps at 4.177 and MBS now unchanged 5.5 coupons and down almost an eighth in 5.0 coupons.  

03:18 PM Weakest levels of the day with MBS down 5 ticks (.16) and 10yr up 5.7bps at 4.213

While much of the recent improvement in the bond market can be tied to various economic reports, there’s been more than a normal amount of improvement due to “risk-off” trading. In other words, economic concerns led to general “sell stocks, buy bonds” vibes. After taking a quick break from the pity party on Friday, the stock market is back at it today. Bonds are once again getting some spillover, but we’re definitely starting to see some hesitation. Stocks are like the friend who wants to keep partying. Bonds are like the friend who has to work in the morning.

This isn’t phenomenon isn’t limited to the past 24 hours.  If we go back to the start of the risk-off episode, we can see bonds consistently take a more measured approach. A chart of yields vs stocks doesn’t show the disparity accurately, so the following chart shows the percent change in stock prices vs Treasury futures prices (a price vs price comparison in percent-change terms). 

The acquisition bucks recent trends that saw depository banks eliminate mortgage lending, but the 2025 market environment may be favorable for consolidation.

President Donald Trump said he would plow ahead with new tariffs on Canada and Mexico starting Tuesday, a broadside against the two biggest US trading partners that underscores his push to remake global trade.