Good Tuesday AM from your Hometown Lender,

Government shutdown day 35.

This shutdown is tied for the longest. I don’t think there are any medals for first place here. Rates are similar to yesterday (and the day before, and the day before), and reprice risk on the day is low. Today should have brought the JOLTS (job openings and labor turnover survey) data, but that won’t happen due to the shutdown. Instead bonds will likely drift sideways on the day, with little reason to either rally or sell-off.

There’s less volatility in bonds than after the September Fed rate cut, and rate sheets are more stable as well, which is a good sign. Now we just twiddle our thumbs waiting for something to break the log jam, one way or the other.

Will it be an end to the shutdown? Or maybe the tariff/trade deal stuff?

Tomorrow the Supreme Court will hear arguments over President Trump’s tariffs, deciding if the President had the legal authority to impose the tariffs. On one hand, this seems like a really big deal, because it could strike down all of the tariffs in place making them null and void, and that would have to be a big deal to markets, right? That would also mean the U.S. government is on the hook to return tens-of-billions of dollars already collected, a feat that most think is actually impossible. However, the Trump administration has said even if that were to happen, it would pivot to impose the tariffs under other emergency rules and start the whole thing over again. It is unlikely that any money would be returned, and unlikely that markets would have much of a reaction.

Market Analysis – Where we are from a higher view:

1. Quick snapshot: where rates sit today

10-year Treasury (the main driver of fixed mortgage rates)

Today the 10-year yield is around 4.08%, down from nearly four-week highs yesterday. TradingView+1
Yields eased after Treasury said it will borrow less than expected in Q4, plus some mixed Fed commentary that kept December-cut odds around 70%. TradingView

Mortgage rates (retail level)

Freddie Mac (as of Oct 30):
30-yr fixed: 6.17%
15-yr fixed: 5.41% – both at their lowest in over a year, fourth weekly decline in a row. My Home+2Freddie Mac+2
Daily trackers today: national 30-yr averages are hovering roughly 6.2%–6.3%, up just a hair (≈1–2 bps) from yesterday. Yahoo Finance+1

Plain-English line for clients:

“Rates are hanging in the low-6s, which is the best we’ve seen in over a year, even if they’ve ticked up a notch from last week’s lows.”

2. What moved markets today

Treasuries & the Fed

The 10-year slipped to 4.08% as traders reacted to lower-than-expected Treasury borrowing needs and tried to parse mixed Fed speeches after last week’s meeting. TradingView
Markets now see about a 70% chance of another 0.25% Fed cut in December, down from ~90% before the meeting but still more likely than not. TradingView+1

Reminder you can share:

The Fed doesn’t set mortgage rates, but its stance on growth and inflation drives Treasury yields, which drive MBS prices, which drive your mortgage rate sheet.

Government shutdown: now a record-tier event

Today marks Day 35 of the federal government shutdown – tying the longest in U.S. history. Reuters+1
Food assistance (SNAP), some Head Start programs, and federal workers (TSA, law enforcement, military) are now missing paychecks, and travel delays are mounting. The CBO estimates the shutdown could cost the economy about $11B if it lasts another week. Reuters
The Senate is taking its 14th vote on a House funding bill, with both parties still blaming each other but some signs of behind-the-scenes progress. CBS News+1

Why that matters for rates:

Shutdown = growth drag → tends to help bonds / keep yields lower.
Shutdown also = missing data (labor reports, some inflation inputs) → markets are flying partly blind, so volatility around the data we do get is higher. ALM First+2Yahoo Finance+2

Oil & inflation expectations

Crude oil (WTI) is trading near $60–61/barrel, having drifted lower on worries about oversupply and a glut in 2026. Reuters+3Trading Economics+3MarketWatch+3
Softer oil prices are quietly helpful for inflation and therefore friendly for interest rates, as long as they’re falling for supply reasons and not because demand is collapsing.

3. Market Analysis – The recent economic backdrop (this week + last)

Manufacturing: still in contraction

The ISM Manufacturing PMI for October (released yesterday) came in at 48.7 – eighth straight month below 50, meaning the factory sector is shrinking. PR Newswire+1
ISM and follow-up commentary point to sluggish demand, tariff-related cost pressures, and slower new orders. Institute for Supply Management

Rates takeaway: weaker manufacturing supports the “slower growth / lower yields” story, as long as prices don’t spike.

Consumers: mood is softer

Conference Board Consumer Confidence (Oct):
Headline index dipped to 94.6 from 95.6.
The Expectations Index fell to 71.5, staying below the 80 level that often flashes future recession risk. PBS+4The Conference Board+4PR Newswire+4

Clients translation:

“People are still spending, but they’re more nervous about the future than they were a few months ago.”

Housing & mortgage activity

Freddie Mac confirmed that rates had fallen for four straight weeks into Oct 30, pulling the 30-yr average down to 6.17%, lowest in over a year. My Home+1
MBA weekly survey (week ending Oct 24):
Total apps +7.1% w/w.
Refi apps +9%, now 57.1% of all applications.
Purchase apps +5%, ~20% higher than a year ago. Reuters+3MBA+3MBA Newslink+3

Narrative you can sell: lower-6% rates have created an “early-thaw”: people who tuned out at 7% are kicking tires again.

4. Fed backdrop: what changed last week

At the October 29 FOMC meeting, the Fed:

Cut the policy rate 0.25% to a 3.75–4.00% target range (second cut in a row). Federal Reserve+1
Said downside risks to employment have risen, while inflation is still “somewhat elevated” but drifting lower. Federal Reserve+1
Announced it will conclude the runoff of its securities holdings (end QT) in December, eventually tilting away from MBS. Federal Reserve+1
Powell emphasized there were “strongly differing views” about December, i.e., the Fed is not on autopilot for more cuts. Reuters+1

For your clients:

“The Fed has moved from fighting inflation at all costs to balancing jobs and inflation. That pivot is a big reason mortgage rates are no longer in the 7s.”

5. Market Analysis – What’s coming the rest of this week

Because of the shutdown, some major reports (like the monthly jobs report) are delayed, but we still get a few important pieces: ALM First+2Yahoo Finance+2

Wed 11/5 – ISM Services (Oct): services are most of the economy; if this drops toward 50, markets will lean harder into “slowdown” expectations.
Thu 11/6 – Weekly jobless claims, productivity & unit labor costs: these feed the “labor market cooling?” narrative the Fed is watching. ALM First+1

In a data-light week, Fed speeches, shutdown headlines, and any surprise in claims can move rates more than usual.

6. Current and near-term rate expectations

Today’s bottom line

Treasury yields: easing from yesterday’s highs (10-yr ~4.08%). TradingView+1
Mortgage rates: still broadly in the low-6s, up just a tick from last week’s trough but well below mid-year peaks. My Home+2Yahoo Finance+2

2–4 week scenarios

Base case – Sideways with a slight downward bias

Manufacturing stays soft, confidence subdued.
No fresh inflation scare; oil stays near ~$60. PR Newswire+2The Conference Board+2
Shutdown either ends or just limps along without new shocks. Reuters
→ 10-yr around 3.9–4.15%.
→ 30-yr fixed mostly low-6s, with high-5s possible via points and strong files.

Upside-rate risk – Data or Fed turns “hotter”

ISM Services surprises strong; claims stay very low; Fed speakers lean anti-cut.
→ 10-yr pushes toward 4.25–4.35%, lenders worsen pricing by ~0.125–0.25%.

Downside-rate surprise – Growth or shutdown shock

Services roll over, claims jump, or shutdown fallout gets uglier (benefits, air travel, confidence). Reuters+1
→ Flight to safety drives 10-yr below ~3.9% and brings better rate sheets, but moves could be fast and fleeting.

7. What’s the message

“Mortgage rates are holding in the low-6s after the Fed’s latest rate cut and a weaker manufacturing report. The big story is a record-long government shutdown that’s slowing parts of the economy and delaying some data. That combination is actually helping keep long-term rates in check, even if it makes markets a bit jumpy day-to-day.”

Lock / float framing:

→ “We’re ~¾% below where rates were in January, and payments have come down. Look at your numbers now, and if we get another leg lower later, talk about a future ‘refi 2.0’ only if it makes sense.”

Closing in ≤30 days:

→ Lean lock-biased. You’re exposed to shutdown headlines, Fed speak, and this week’s services/employment data — a bad surprise can pop rates faster than a good surprise helps.

45–90 days out:

→ Float with rules, not vibes. For example:

“If the 10-yr breaks above ~4.2%, we lock.”

“If pricing worsens by ~0.25% in cost, we lock.”

Refi & move-up conversations: