Good morning on this best day of the week Wednesday, from your hometown lender,

Rates are similar to yesterday, and reprice risk on the day is low.

Bonds improved a little through the day yesterday. This morning a bit of pullback with mortgage bonds opening the day a bit lower and the 10-yr yield creeping a bit higher. Nothing on the economic calendar to give us any pushes either way, and other than the same headlines as yesterday about President Trump trying to “fire” Fed Governor Lisa Cook (which markets have basically shrugged off while it plays out, eventually in the courts) there’s nothing of note going on today.

Tomorrow brings the revised Q2 GDP numbers, and Friday brings the PCE inflation data, but neither one will lead to much movement on rate sheets. Friday is the last hoorah for the summer, with a long Labor Day weekend, so it is unlikely we get any big moves in rates to end the month (even with month’s end trading).

There is no great reason to float rates past today.

🏦 Mortgage Market Overview – August 27, 2025

30-YR Fixed Mortgage: 6.58% (↔︎)
15-YR Fixed Mortgage: 6.23% (↔︎)
10-YR Treasury Yield: 4.29% (↑ +3bp)
FNMA 30YR 6.0 MBS Price: 102.08 (↑ +8bp)
Mortgage–Treasury spread: ~225bps (slightly compressed)
Yield curve remains flat (2s10s spread: 59bps), signaling economic uncertainty

📰 Economic & Political Headlines

🧠 Fed Policy Signals

Powell’s Jackson Hole speech hinted at a possible rate cut in September, citing “evolving risks” and a potential shift in the Fed’s inflation framework.
Fed speakers this week (Logan, Williams, Barkin, Waller) may reinforce dovish tones, especially ahead of Friday’s Core PCE release.

📉 Labor Market & Inflation

Initial jobless claims rose to 235K last week, with continuing claims trending higher.
Core PCE (Fed’s preferred inflation gauge) due Friday. Forecast: +0.3% MoM, +2.9% YoY.
CPI and PPI readings earlier this month showed persistent inflation pressures.

🏠 Housing Market Update

New home sales came in at 652K units, slightly down MoM but above expectations.
Median price fell ~6% YoY to $403,800.
Builders continue offering incentives, but affordability remains a major headwind.

🔮 Forward-Looking Rate Forecast

📉 Rate Cut Odds

Markets are pricing in a 90% chance of a 25bp Fed cut on September 17.
If Core PCE surprises to the upside, odds may fall—keeping mortgage rates sticky.

📈 Yield Curve & Recession Watch

Flat curve suggests uncertainty, not imminent recession.
A steeper curve would signal stronger growth expectations and could compress mortgage spreads.

💵 Dollar & Global Factors

Weakening U.S. dollar may stoke imported inflation, complicating Fed’s path.
Global bond flows remain cautious, limiting downward pressure on long-term yields.

📅 Weekly Economic Calendar (Aug 26–30, 2025)

Wed 8/27: MBA Mortgage Apps, GDP (2nd estimate), Pending Home Sales (High impact)
Thu 8/28: Weekly Jobless Claims, Personal Income & Spending, Core PCE (Very High impact)
Fri 8/29: Chicago PMI, Final Consumer Sentiment (Medium impact)

🔔 Key Watchpoint: Thursday’s Core PCE and GDP revision will be pivotal for rate direction. A hot inflation print could stall Fed easing and keep mortgage rates elevated.

📌 Strategic Takeaways for Clients

🕒 Locking vs. Floating: Locking is prudent ahead of Thursday’s inflation data.

Posted by Noble Home Loans | Equal Housing Lender | NMLS #328275 |
For informational purposes only. Not a commitment to lend. Rates subject to change.

Stay safe and make today great!