Decent Gains Remain Intact; Stock Market Contribution is a Wild Card

The rescheduled release of the September jobs report played out exactly as we expected in terms of bond market impact. Volumes surged to the highest levels since the late October Fed announcement and bonds managed a clear response in spite of arguably mixed results. That said, the response was still logical given the Fed’s stated preference for the unemployment rate over the payroll count.  One could imagine an even more decisive rally if NFP was low or negative (or if the unemployment rate was another 0.1% higher). The AM rally may have fizzled out by 10:30am if not for another sizeable sell-off in stocks. This is a bit of a wild card going forward (i.e. we have to worry that a big correction in stocks could push yields higher).

Econ Data / Events

Non Farm Payrolls (Sep)

119K vs 50K f’cast, 22K prev

Participation Rate (Sep)

62.4% vs — f’cast, 62.3% prev

Philly Fed Business Index (Nov)

-1.7 vs -3.1 f’cast, -12.8 prev

Philly Fed Prices Paid (Nov)

56.10 vs — f’cast, 49.20 prev

Unemployment rate mm (Sep)

4.4% vs 4.3% f’cast, 4.3% prev

Market Movement Recap

08:34 AM MBS up 2 ticks (.06) and 10yr down 1.7bps at 4.121

11:50 AM Best levels of the day with MBS up 6 ticks (.19) and 10yr down 3.5bps at 4.103

03:10 PM MBS up 5 ticks (.16) and 10yr down 3.3bps at 4.105

It’s shaping up to be a “no whammies” sort of morning for the bond market.  There’s no denying that the jobs report was a highly tradeable event. The 30 minutes of volume following the release was by far the highest since the October 29th Fed announcement. But that volume has been fairly well balanced between buyers and sellers.  Credit the uptick to 4.4% in the unemployment rate for offsetting the job count coming in at 119k vs 50k f’cast.  The downward revision to August also isn’t hurting (-4k from +22k). Bonds are managing to hold at just slightly stronger levels so far.

“Here we are, a week away from Thanksgiving, and I’m in Kansas City. My family told me to stop telling Thanksgiving jokes, but I said I couldn’t quit cold turkey.” The CFPB isn’t going away “cold turkey” but yesterday’s personnel move was a reminder that there are clever people in Washington DC. It was a follow up to Trump Administration court filings last week that said the CFPB was on track to run out of money to operate at the beginning of next year and argued that it was legally prohibited from seeking an infusion of funding from the Federal Reserve, which is the bureau’s primary source of funding. Yesterday Donald Trump nominated Stuart Levenbach, a name you can forget as he is merely a placeholder, to be the permanent head of the CFPB. He’s a top aide to White House budget director Russ Vought. A CFPB spokesperson said the nomination was a “technical” maneuver intended to extend Vought’s ability to continue serving as the acting director of the agency without needing Senate confirmation, i.e., the move is designed to empower Vought to continue leading the agency as he moves to shut it down in the coming months. (Today’s podcast can be found here and this week’s are sponsored by Figure. Figure is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. And, embedding their technology is easy. Hear an interview with Figure’s Michael Tannenbaum on how small-balance first-liens and HELOC-as-refi strategies work, the latest developments after the company’s IPO, and his thoughts on the current lending climate.)

Travis Hill’s nomination to lead the Federal Deposit Insurance Corp. was recommended favorably by the Senate Banking Committee to the full Senate Wednesday morning in a 13-11 party-line vote.

Federal Reserve Gov. Stephen Miran argues that banks holding excess reserves are keeping the central bank’s balance sheet bigger than it should be, and suggested that regulatory changes could help bring those reserves down.

Rocket enters the crowded DSCR market with a product for experienced investors, joining rivals as non-QM lending grows and demand for single-family rentals stays strong.

Equities move through a stack of intermediaries, from custodians and clearing firms to brokers. Figure’s blockchain structure aims to cut out third parties.

Consecutive weeks of mortgage rate increases resulted in a 5.2% decrease in mortgage loan application volume, according to the Mortgage Bankers Association.

As I type these words, I am sitting in front of one of Chuck Berry’s early residences in St. Louis. STL has a good musical reputation, a fine mortgage association, a Fed that puts out great research, and has many nice neighborhoods. But to call this specific area where I am sitting a “transitional” neighborhood would be generous. Although there is potential, nearly every house standing could use an immense amount of work, and the residents probably aren’t regulars at home improvement stores. In fact, across the nation people aren’t rushing off to specifically Home Depot, either because of consumers slowing down or because people are boycotting it and view it as a “threat to democracy.” Strange times. Indeed, HD missed earnings estimates and took down its forecast for the fourth quarter, either because of consumer uncertainty or because consumers are going elsewhere. In other trends, how’s your companies loan products for cities? A new study shows that 80 percent of the world’s population now lives in urban areas, like St. Louis and Kansas City. (Today’s podcast can be found here and this week’s are sponsored by Figure. Figure is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. And, embedding their technology is easy. Hear an interview with HomeLight’s Nick Friedman on lender sentiment heading into 2026, with optimism rising and new buyer behaviors taking shape that could reshape the housing market.)

It was a complicated day for mortgage rates.  Officially, at the time of this article, the average top tier 30yr fixed rate is a hair lower than it was yesterday.  But rates are based on bonds and bonds are telling a different story. In the wake of the release of the minutes from the most recent Fed meeting, bonds lost ground. This implies higher rates. The only reason it hasn’t resulted in higher rates today is timing. Specifically, the bond market losses just happened and most lenders have not yet made any adjustments. The implication is that tomorrow morning’s rates would be higher than they are today assuming bonds don’t change between now and then. An additional layer of complication is that we’ll receive the September jobs report at 8:30am ET tomorrow.  Because most mortgage lenders publish their rates between 9:30and 10:30am ET, this means there will be another source of probably volatility to digest before rates come out. Bottom line: if tomorrow morning’s jobs data is much stronger than expected, rates would be quite a bit higher.  But if the jobs report is weaker, it could offset the bond market losses seen this afternoon, thus keeping rates relatively unchanged.