Good Tuesday morning from your Hometown Lender,

Market Analysis 2/11 – Yesterday, mortgage bonds held steady through the day. The advice is always/was not to float into today’s jobs data, because it is just too volatile. It is sage advice.

Rates today are a bit worse, which is actually a win after the jobs data came in hot, despite expectations everywhere. There were 130,000 new jobs created, versus expectations of about 65,000. Unemployment dropped to 4.3% from 4.4%, despite the participation rate increasing from 62.4% to 62.5%.

That is a double whammy, because it means that the drop in unemployment was not caused by fewer people looking for jobs. The third component, wages, were up 0.4% versus the 0.3% expected. Overall this was a much stronger report than anyone was expected, and it crushed the hopes of a Fed rate cut before June, which also was bad for bonds this morning.

Market Analysis – from a higher view:

Market Analysis – Quick Snapshot (Wed, Feb 11, 2026)

10-year Treasury: 4.16% at the latest official close (Feb 10), with yields pushed firmer after this morning’s stronger jobs print.
Fed funds rate: 3.50%–3.75% after January’s FOMC hold (10–2 vote).
Inflation (latest official CPI): December CPI came in at +2.7% YoY headline and +2.6% YoY core (+0.2% MoM core). The next CPI report (Jan) is due Friday, Feb 13 (shutdown-delayed).
Mortgage rates (national ballpark):
- Freddie Mac PMMS (week ending Feb 5): 30-yr 6.11%, 15-yr 5.50%
- Bankrate daily read (Feb 11): roughly 6.12% on 30-yr fixed (6.18% APR)
  Think of today’s practical range as low-6s, with pricing variance by profile/LLPAs.

1) Market Analysis – What Hit This Morning (Labor + CPI Setup)

Today’s big print was labor, not CPI:

Nonfarm payrolls: +130k vs ~+70k expected
Unemployment rate: 4.3%
Avg hourly earnings: +0.4% MoM, +3.7% YoY
2025 payroll growth was revised lower overall, but January still came in stronger than expected.

Narrative you can use:
“The labor market looks stable enough to keep the Fed patient. That means Friday’s CPI likely has even more influence on near-term rate direction than usual.”

2) Market Analysis – Fed Watch

Markets trimmed near-term easing bets after jobs: roughly a 1-in-5 chance of a cut by April, with June still the base case but less of a slam dunk than pre-jobs.
Next FOMC meeting: March 17–18, 2026.

Translation: one strong labor report didn’t end the cut cycle story, but it did push the “not yet” camp back into the driver’s seat.

3) Market Analysis – Where Mortgage Rates Actually Are

Weekly benchmark (Freddie): still in the 6.1% neighborhood for 30-year fixed.
Daily retail snapshots (Bankrate): still around low-6s nationally.

Practical reality: borrower-level pricing dispersion is huge right now (credit, LTV, occupancy, loan size, property type, points strategy). Same market, very different payment outcomes.

4) Market Analysis – Housing Market Check

Latest NAR read (Dec data): existing-home sales rose 5.1% to 4.35M SAAR.
Inventory rose to 1.18M homes (3.3 months supply).
Median existing-home price: $405,400 (+0.4% YoY).

This is still a “constrained supply meets rate-sensitive demand” market. In plain English: activity happens, but only when price/payment math works.

5) Political Backdrop & Fed Independence

Reuters polling shows economists broadly expect a Fed hold through May with June as the more likely next cut window.
On Fed leadership: Reuters’ survey found over 70% worried about possible erosion in Fed independence post-Powell; many want to hear more at nomination hearings before final judgment.
Fiscal side: CBO projects a $1.853T FY2026 deficit (~5.8% of GDP), which can keep upward pressure on long-end yields via term premium dynamics.

Yes, macro this week is a little like driving in Vegas rain: technically possible, mildly dramatic, everyone claims they’re fine.

6) Market Analysis – What This All Means for Rates Going Forward (Working Scenario Grid)

These are planning scenarios, not predictions carved in marble.

Scenario	What likely triggers it	10Y Treasury zone	30Y mortgage implication
Base case	CPI near expectations + stable labor	4.10%–4.30%	~6.00%–6.30%
Better-rate case	Softer CPI trend + cooler growth	3.95%–4.10%	~5.75%–6.00%
Worse-rate case	Hot CPI / fiscal-term-premium pressure	4.30%–4.50%	~6.30%–6.60%

The data anchor behind this grid is today’s labor surprise, current Fed posture, and still-elevated deficit backdrop.

7) Practical Takeaways

Payment strategy beats rate obsession: seller credits, targeted buydowns, and term selection are still the fastest way to improve affordability now.
Friday CPI is the tactical pivot: keep clients prepped for intraday volatility.
Agent conversation edge: lead with monthly payment scenarios, not headline rate chatter.

8) Lock vs Float (Tactical Guide)

0–21 days to close: lock bias.
22–45 days: neutral to slight lock bias unless CPI breaks cooler.
45+ days: selective float only if client can tolerate volatility and we have a clear fallback lock trigger.

Stay safe and make today great!