Hah! Just kidding… But did you think, “Oh no!” or “Yippee!” when you saw that subject line? The ups and downs of the Consumer Finance Protection Bureau, an agency that touches mortgage debt, credit cards, credit bureaus, and cash substitutes, is all the talk at the TMBA in Houston. One industry vet wrote me saying, “As much as we all complain about regulation through enforcement, at least there was an ‘adult in the room’ telling us to eat our vegetables. As a colleague of mine said, ‘I have seen this movie before, the popcorn is great but the ending sucks.’” Today at noon, PT, 3PM ET, Capital Markets Wrap, presented by Polly, will be covering the turmoil at the CFPB, the impact on TRID/ATR enforcement, tariffs and inflation, and the misconception that regulations will disappear without legislative change. Don’t forget that OMB Director Russell Vought was hit with two union lawsuits after he issued directives freezing much of the CFPB work and work tasks. Is reading attorney Brian Levy’s Mortgage Musings a work task? Folks at the CFPB have to figure that out, but others can decide for themselves whether to read Levy’s latest about the CFPB shutdown. (Click here to view prior editions and to subscribe for free.) But wait… there’s more! A U.S. judge on Monday ordered the Trump administration to fully comply with a previous order lifting its broad freeze on federal spending: another court order. (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. Originators who leverage their Marketing Solutions as part of their customer retention practices have seen their pipelines increase by up to 4 times when compared to traditional lead generation methods. Hear an interview with Logan Finance’s Nick Pabarcus on the 2025 outlook for non-QM, how those loans are priced, how the anticipated rate environment will impact non-QM business, and the future of Non-QM products.)

Allegations of gender discrimination and improper loan origination practices against LoanDepot were dismissed on Feb. 7.

Most participants in a monthly Wolters Kluwer survey no longer think the next short-term rate reduction will be in March.

Bond traders anticipate that yields will remain elevated — and range bound — until there’s a lot more clarity on where the economy is heading.

As a market leader, Rocket Companies rebranding comes in the foreground of several court battles and fluctuating earnings performance.

Acting Consumer Financial Protection Bureau Director Russell Vought ordered bureau employees to “stand down” and perform no work, effective immediately.

Perhaps the most notable market-related headline over the weekend was Trump’s pre-announcement of 25% tariffs on steel and aluminum (in addition to existing tariffs). The comments were made on Sunday well before the market opened, and while there was an initial pop in forex markets at the open, it was almost immediately erased.  Bonds were completely unaffected and are trading in just slightly stronger territory to start the week. There were some big block trades right at the 8:20am open but even bigger trades in the other direction around 10:45am ET. 

There is no major econ data today and it wouldn’t be a surprise to see traders play it closer to the vest ahead of Wednesday’s CPI data.  Tomorrow’s Powell testimony is also possibly a wild card, but not on the same level of CPI in terms of volatility potential.

Mortgage rates have been on a vacation from volatility since January 16th when they fell back toward 7% after hitting the highest levels since May 2024. Top tier 30yr fixed rates have operated inside a 0.13% range since then and a narrower 0.08% range for the past 2 weeks.  Today was technically a win, but it was fairly small (-0.02%). Any time our daily index is that close to the previous day, it’s safe to assume that most lenders are effectively unchanged. Rates are definitely still willing to react to major economic reports when results fall far from forecasts, but there were no such reports on tap today.  The same is true for tomorrow, but volatility is still a moderate risk due to Fed Chair Powell’s semi-annual congressional testimony. Then on Wednesday, volatility potential increases significantly with the release of the Consumer Price Index (CPI), which is the first of the two big inflation readings for any given month.  Inflation is always a consideration for interest rates, but it’s particularly important at the moment as investors wait for evidence that progress toward the 2% has resumed after potentially stalling at just over 3% last summer. While the annual inflation number will benefit in the coming months as the high inflation readings from early 2024 fall out of the calculation, those benefits wouldn’t show up in earnest until June.

Little Changed After Early Rally and Steady Selling

Monday ended up being a relative non-event for the bond market. Trading was almost perfectly flat overnight. Big trades moved the whole pile right at the open and then again about 2 hours later.  This effectively set the range for the rest of the day through the 3pm CME close.  Tariff headlines had zero impact on bonds overnight, despite a token, fleeting impact on forex.  

Market Movement Recap

10:17 AM Flat overnight and slightly stronger now.  MBS up 3 ticks (.09) and 10yr down 2.6bps at 4.466

12:59 PM 10yr down 0.2bps at 4.49, and MBS now back to unchanged. 

03:15 PM Treading water at weakest levels.  MBS unchanged and 10yr up half a bp at 4.497

Looking to recreate the buzz from its 2016 ad, Rocket leads spectators at the Superdome into a live version of ‘Take Me Home Country Roads’ during the big game.