Regarding rate movement, the bond market often does the Fed’s job for it, and so whatever the Fed’s Open Market Committee actually does is almost an afterthought. The partial U.S. Government shutdown is hurting economic activity, and companies like Newrez are posting and how the shutdown is impacting lending. The FHA Office of Single Family Housing released FHA INFO 2026-05 and some of its mortgage insurance programs “will be operational but with limited services. Under a funding lapse, FHA’s actions and decisions about the operations that continue are governed by the U.S. Constitution…” The shutdown and chatter from the hallways will be the focus of today’s Advisory Angle at 3PM ET where Sue Woodard brings the conversation straight from the floor of the MBA’s IMB Conference. (Today’s podcast can be found here and this week’s are sponsored by Truework, the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage. Today’s features an interview with TLS’ Will Pendleton and Calque’s Jeremy Foster on how the Buy Before You Sell model helps brokers remove timing and contingency risk for today’s buyers, and why transparent, well-integrated solutions like this are increasingly becoming essential tools for brokers navigating more competitive and complex housing markets.) Products, Services, and Software for Brokers and Lenders

The bad news: mortgage rates moved up to their highest levels in 2 weeks today.  The good news: the rate range has been very narrow during that time, so there’s not too much of a difference between 2-week highs (6.20%) and lows (6.15%).  Today’s move wasn’t a product of anything that happened today. Rather, the culprit was the focal point of our coverage yesterday. Specifically, an economic report on the manufacturing sector was exceptionally strong yesterday. The result was a weaker bond market and, thus, an implication for higher rates. But the report came out after most mortgage lenders had published rates for the day and the average lender didn’t see quite enough weakness in bonds to justify a mid-day rate change yesterday. Instead, they simply waited until this morning to make the expected changes.

While not as disruptive or publicized as the most recent example, there’s a partial government shutdown underway. Even if the House passes the funding legislation today, the Bureau of Labor Statistics (BLS) has already said they will not be publishing either of this week’s key reports (JOLTS, which would have been today, and Friday’s jobs report). This is consistent with our understanding of the way BLS works. In fact, it’s not uncommon for the jobs report to come out on the 2nd Friday in March simply because there weren’t enough work days in February to compile the data. To some extent, tomorrow’s ADP and ISM data could serve as supporting actors. But in the meantime, bonds continue kicking around on a piece of ground in their hometown, waiting for someone or something to show them the way.  4.2-4.3 is the new 4.1-4.2.

The National Consumer Law Center is claiming the Credit Data Industry Association wants to suppress Consumer Financial Protection Bureau complaint filings.

The mortgage lender will also conduct its own independent audit to determine if any further instances of unlicensed activity occurred after 2022.

The average homebuyer who purchased a home below the asking price last year received a 7.9% discount, the largest since 2012, Redfin found.

The SEC named Demetrios “Jim” Logothetis as chairman of the PCAOB, and Mark Calabria, Kyle Hauptman and Steven Laughton as board members.

The Senate-approved bill that hadn’t yet cleared the House at the time of this writing would fund agencies like HUD through the end of the fiscal year.

Data-Driven Sell-Off Dominates The Day. No Jobs Report on Friday

Very little changed after this morning’s commentary. At the time, we were watching bonds sell-off somewhat sharply in response to an exceptionally strong ISM Manufacturing report. As is often the case with data-driven selling sprees, the worst was over in the first 10 minutes and the rest of the day was broadly sideways. That said, it wasn’t without its interesting updates. Chief among them was news that this Friday’s jobs report would be postponed due to the government shutdown (and same story with tomorrow’s JOLTS data). 

Econ Data / Events

ISM Manufacturing Employment (Jan)

48.1 vs — f’cast, 44.9 prev

ISM Manufacturing PMI (Jan)

52.6 vs 48.5 f’cast, 47.9 prev

ISM Mfg Prices Paid (Jan)

59.0 vs 60.5 f’cast, 58.5 prev

Market Movement Recap

08:41 AM roughly unchanged after bonds give up overnight gains in early trading. MBS down 2 ticks (.06) and 10yr up half a bp at 4.24

12:02 PM much weaker after ISM, but flat after initial reaction. MBS down 6 ticks (.19) and 10yr up 3.9bps at 3.828

03:28 PM Treading water near weakest levels. MBS down 6 ticks (.19) and 10yr yr up 4.2bps at 3.831

Some would say there were warning signs, such as last week’s Chicago PMI surging to the 2nd highest level since 2022, but that was generally dismissed as a noisy outlier in a data set that is volatility-prone. In this case, however, Chicago PMI was prescient. Today’s ISM Manufacturing data surged to the highest level since 2022, both in terms of the headline and new orders. Even though this report isn’t as much of a market mover as the non-manufacturing version, this is a big enough beat to make an exception. Bonds are clearly responding, and not in a rate-friendly way.