Good morning on this best day of the week from your Hometown Lender,

Yesterday saw mortgage bonds lose a lot of ground through the afternoon, and the 10-yr Treasury yield rose over concerns that the war will take longer than President Trump predicts.

Today is rollover day, so if you are watching actual mortgage bond trades (as I am sure you are), today’s price is impacted by 13bps on the roll over.

Despite that, on reports of three ships being hit with projectiles in the Strait of Hormuz, has oil moving higher and equities and bonds moving lower. Rates are higher today.

Today’s CPI inflation report was in line with forecasts and core inflation rose at the slowest pace since 2021, but that was all background noise amid the Middle East conflict.

Reprice risk today remains high; bonds remain volatile based on headlines and oil prices.

Market Analysis – From a higher and better view:

Market Analysis – Quick Snapshot

CPI (Feb): +0.3% MoM, +2.4% YoY; Core CPI: +0.2% MoM, +2.5% YoY (basically “in line,” not “uh-oh”).
10-year Treasury: hovering around ~4.20%–4.22% this morning.
MBS (UMBS 30yr 5.0): 99.41 (-0.08); 10Y shown on MND: 4.2072 (+0.0472) (tight rope day).
Mortgage Rates (Freddie Mac weekly, 3/5): 30Y 6.00%, 15Y 5.43%.
Mortgage Rates (MND daily index, last updated 3/10): 30Y 6.09%, 15Y 5.69%, Jumbo 6.45%.
Current-events driver: Oil-shock / Iran-war headlines + coordinated policy response (IEA reserve release).

1) Market Analysis – What Hit This Morning (CPI)

Headline CPI (Feb):

CPI-U: +0.3% MoM (seasonally adjusted) after +0.2% in January.
YoY: +2.4% (same as January).

Core CPI (Feb):

Core (ex food & energy): +0.2% MoM; +2.5% YoY (also same YoY as January).

What drove it:

Shelter: +0.2% MoM (still the biggest monthly contributor).
Energy: +0.6% MoM (and this is before the newest oil-war volatility fully shows up).
Food: +0.4% MoM.

Market reaction (early):

Reuters noted yields rose after the CPI report, with the 10-year around ~4.18% shortly after release—because the market is already looking past Feb and staring at energy risk.

Narrative you can use:
“Inflation didn’t re-accelerate in February—good news. But markets are treating this CPI like a ‘snapshot before the storm,’ because energy/geopolitics can rewrite the next few prints.”

2) Market Analysis – Fed Watch

Today’s CPI doesn’t force the Fed to panic… but it also doesn’t give them a victory parade.
The bigger issue: energy-driven inflation expectations can keep the Fed cautious even if “core trend” is behaving.

3) Market Analysis – Where Mortgage Rates Actually Are

Freddie Mac (3/5): 30Y 6.00%, 15Y 5.43%.
MND daily index (3/10 update): 30Y 6.09% (down 0.05 on the day), Jumbo 6.45%.
Why rate sheets are still jumpy: MBS is soft this morning (UMBS 5.0 99.41, -0.08) and the 10-year is elevated (~4.2%).

4) Housing Market Check

Fresh housing context that matters right now:

Existing-home sales (Feb): +1.7% to 4.09M SAAR.
Inventory: 1.29M units; 3.8 months supply.
Median price: $398,000 (+0.3% YoY), per NAR/AP coverage.

Read: We were getting a spring thaw in transactions as rates eased… and now the market’s watching whether the oil shock refreezes affordability.

5) Political Backdrop & Fed Independence

This is the current-events core:

IEA announced a record strategic reserve release (~400M barrels) to counter the oil supply shock.
Iran signaled escalation risk, including threats that could push oil far higher (their rhetoric mentioned $200 oil).
OPEC confirmed Saudi output jumped in February (pre-conflict contingency behavior), and they’re monitoring geopolitical spillovers.

Translation: the bond market is trying to price CPI math while also pricing oil-war chaos. That’s like doing your taxes on a trampoline.

6) Market Analysis – What This All Means for Rates Going Forward

Scenario	What happens next	Rate implication
1) “CPI holds + oil cools” (best case)	CPI stays ~2–2.5% trend and the reserve release + diplomacy stabilizes crude	10Y drifts lower → mortgage rates grind down
2) Base case: “headline whiplash”	Inflation is fine, but energy headlines keep ripping expectations around	Rate sheets stay choppy; good lock windows appear briefly
3) “Oil shock sticks” (negative)	Disruption persists / escalation drives crude higher for longer	Yields stay firm → mortgage rates resist falling (or bump up)

7) Practical Takeaways

Buyers: February CPI didn’t blow up the “rates slowly improving” story—but energy headlines can still yank pricing around day to day.
Sellers: Transactions were already improving (Feb sales rebound), so well-priced, well-presented homes should still move—especially as spring ramps.
Agents: Expect more “payment conversations” than “Pinterest conversations” this week. (Both are important… one just has math.)

8) Lock vs Float

30–60+ days out: Float with rules. If energy stabilizes and CPI stays tame, we can get better windows—just don’t float on hope alone.
Closing in 7–21 days: Lock-leaning. CPI is behind us, but energy/geopolitics can reprice the bond market fast.

Stay safe and make today great!