It would be an overstatement to say that this week’s econ calendar has been “active,” but yesterday at least had unscripted comments from Fed Chair Powell, several other Fed speakers, and an occasionally important S&P PMI report. In contrast, today’s only monthly econ report is New Home Sales which is almost always a non-event for bonds and today is proving to be no exception. This leaves only the 5yr Treasury auction to inspire intraday movement–at least in terms of scheduled events. Incidentally, concessionary pre-auction selling (or, rather, buyers waiting until 1pm) could also be driving some of today’s moderate weakness, but a majority of the selling lines up with a big bond announcement from Oracle at 8am ET. 

“Yesterday I was devastated to learn that the 2025 Psychic Prediction Convention was cancelled due to unforeseen circumstances.” Yesterday, while the stock price of Better (BETR) zoomed to the moon (who saw that coming?), the audience at the Loan Vision Innovation event heard from the MBA’s VP Marina Walsh who, speaking for the MBA’s economics team and looking into the future, is seeing signs of a slowdown. “We haven’t felt the full impact of the tariffs yet. Job growth is slowing, and job search times have increased.” The MBA believes that we’ll see 2-3 fed funds cuts coming up, but expect minimal impact on mortgage rates and 10-year Treasury yields. So don’t expect 30-year rates to drop below 6 percent. But “flash” refi opportunities will continue to appear, with some companies better at acting quickly than others. Meanwhile, Fannie Mae believes that mortgage rates will end 2025 and 2026 at 6.4 percent and 5.9 percent, respectively, according to the September 2025 Economic and Housing Outlook. (Today’s podcast can be found here and this week’s podcasts are sponsored by BeSmartee, the most innovative mortgage technology platform for banks, credit unions, and non-bank mortgage lenders. Hear an interview with FutureWave Finance’s Steve Thomas on the capital markets landscape, focusing on mortgage rate dynamics, policy transmission, shifting market share between CFIs and non-banks, and the impact of demographic trends amid a pause in product innovation.) Services, Products, Software, and Tools for Lenders and Brokers

Financial markets tend to shrug off threats of a shutdown given the history of standoffs being resolved. Both sides are more dug in this time.

With comments on the proposed repeal due Sept. 26, stakeholders must demand decisions based on data — not politics, according to the founder of 480 Advisors.

The credit score provider has developed “focused” language artificial intelligence models purpose-built for tasks like detecting payment fraud, assessing risk and recommending next best actions.

Federal Reserve Chair Jerome Powell said in a speech Tuesday that the central bank’s policy stance is “modestly restrictive,” a stance that will give the central bank flexibility to react to an uncertain economic future.

Refinancing indicators recorded muted gains as home sales challenges persisted ahead of a period when politics may change the market outlook.

Modestly Stronger After No Whammies From Powell

Last week’s press conference with Fed Chair Powell could be summed up as “more hawkish than the market expected.” After being compounded by strong econ data on Thursday morning, the selling spree ran its course and we’ve been mostly sideways over the past 3 days. Today ended up being the best version of sideways with yields almost making it back to Thursday’s closing levels. Most of the move happened after Powell finished a Q&A this afternoon. This suggests traders were relieved that he didn’t reinforce the hawkish talking points from last week. All told, it wasn’t a big move, but it was a friendly one nonetheless.

Econ Data / Events

S&P Global Composite PMI (Sep)

53.6 vs 54.6 f’cast, 55.1 prev

S&P Global Manuf. PMI (Sep)

52 vs 52 f’cast, 53.0 prev

S&P Global Services PMI (Sep)

53.9 vs 54 f’cast, 54.5 prev

Market Movement Recap

09:56 AM Modestly stronger overnight. No major reaction to PMI data.  MBS up 2 ticks (.06) and 10yr down 1.2 bps at 4.138

12:53 PM MBS unchanged and 10yr down 1.2bps at 4.137

01:47 PM Making some gains after Powell Q&A.  MBS up an eighth of a point and 10yr down 3.6bps at 4.112

03:52 PM heading out near best levels.  MBS up 5 ticks (.16) and 10yr down 4bps at 4.109

Fed Chair Powell speaks today at a chamber of commerce luncheon in Providence. While the venue may not possess the gravitas of last week’s press conference, any opportunity for Q&A with the Fed Chair is an opportunity for markets to evolve their understanding of Powell’s playbook. Past examples of such a Q&A sessions in the week following a Fed press conference with a clearly hawkish bias have tended to see Powell push back toward a more balanced takeaway. On rarer occasions, he’s doubled down on the hawk talk. With S&P PMI data failing to inspire, Powell’s Q&A (beginning at 12:35pm ET) is the day’s biggest potential source of volatility.
Bonds are broadly consolidating after last week’s sell-off with 10yr yields asymptotically finding support in the 4.15-4.19 range, which has been a stark dividing line between strength and weakness since last summer.

At recent conferences I’ve attended, including here in Atlanta at the Loan Vision Innovation Conference, talk of federal government partisanship, posturing, and shutdowns has crept into discussions. Lenders would definitely be impacted, and this month’s STRATMOR piece is titled, “No Lender Wants a Government Shutdown, but Just in Case…”. Accurately measuring and monitoring business and trends is always a focus, and interestingly, the number of foreign buyers buying homes in the U.S. has risen. Speaking of which, in the real estate world, brokerage giant Compass is set to become the largest residential real estate firm in the world after announcing a deal to acquire major rival Anywhere for $1.6 billion. Compass, which also operates Christie’s, will take control of Anywhere’s subsidiary brands, including Century 21, Sotheby’s, and Coldwell Banker. The all-stock deal values the combined companies at roughly $10 billion and will create what is by far the largest residential real estate brokerage in the world. One industry vet wrote to me saying, “If one company owned 67 percent of all the fuel oil in the U.S., or a bank controlled 67 percent of all deposits, I’m guessing the DOJ might ask questions, right?” (Today’s podcast can be found here and this week’s podcasts are sponsored by BeSmartee, the most innovative mortgage technology platform for banks, credit unions, and non-bank mortgage lenders. Hear an interview with FutureWave Finance’s Steve Thomas on the capital markets landscape, focusing on mortgage rate dynamics, policy transmission, shifting market share between CFIs and non-banks, and the impact of demographic trends amid a pause in product innovation.)