2026-09-23
Treasuries Stable After Recent Run-Up; Market Awaits Key Data
Mortgage rates, having recently climbed according to weekly benchmarks, are likely to hold steady following a flat day in the 10-year Treasury. With no major economic releases today, the market will consolidate ahead of significant data next week, keeping mortgage rate volatility somewhat subdued in the immediate term.
Vabasso Rate Outlook
Today's Mortgage Market
Mortgage rates are expected to be rangebound today. The most recent weekly Freddie Mac PMMS data, from September 17th, showed a significant increase, with the 30-year fixed rate rising 19 basis points to 6.95% and the 15-year fixed rising 17 basis points to 6.26%. This reflects the upward pressure on Treasury yields seen in the prior week. Given the 10-year Treasury's flat performance yesterday, any directional movement in primary mortgage rates today will primarily be a function of marginal spread adjustments rather than a direct Treasury catalyst.
MBS
Licensed current MBS pricing data is not available. Therefore, we rely on Treasury movements and derived spreads as indirect indicators. The stability in the 10-year Treasury yesterday suggests a neutral outlook for MBS valuations. The primary mortgage/Treasury spread remains elevated at 201 basis points (anchored to the Sep 17 PMMS and 10-year Treasury). This wide spread continues to indicate that MBS are underperforming Treasuries, reflecting persistent supply/demand imbalances and rate volatility concerns.
Treasuries
Treasury yields closed largely unchanged yesterday, with the 10-year Treasury (DGS10) at 4.96% and the 30-year (DGS30) at 5.29%. The 2-year Treasury (DGS2) saw a modest 5 basis point decline to 4.71%. This pause follows a period of significant upward movement in longer-dated yields. The 2s10s spread remains inverted but tight at 25 basis points, indicating continued uncertainty about the medium-term economic outlook and the Federal Reserve's policy path. With no high-impact data on today's calendar, Treasuries are likely to trade defensively, with participants positioning for upcoming economic reports.
The Economy
No high-impact economic data was released yesterday or is scheduled for today. The market is in a holding pattern, anticipating key releases later this week and into early October. Next week brings Initial Jobless Claims (Sep 24), Durable Goods (Sep 25), and critically, PCE Inflation, GDP, and JOLTS data towards the end of September, followed by the Employment Situation (Nonfarm Payrolls) on October 2nd. The absence of fresh data leaves the market to process the existing narrative of a resilient economy, persistent inflationary pressures, and the Fed's 'higher for longer' stance. Oil prices (WTI Crude) remain elevated, closing at $107.02 last week, which continues to pose an inflationary risk.
What Matters Today
Today is light on market-moving economic releases. The focus will shift towards tomorrow's Initial Jobless Claims and the Preliminary U.S. Imports for Consumption of Steel Products data, though neither is expected to significantly alter the broader rate outlook. Market participants will likely monitor geopolitical developments and any commentary from Federal Reserve officials, though no major speeches are scheduled. Treasury auctions, if any, could also influence intraday price action, but none are listed as high impact. The overall tone is one of consolidation ahead of next week's packed calendar.
What Mortgage Professionals Should Know
Mortgage professionals should communicate to clients that while Treasury yields paused yesterday, the underlying drivers for higher rates (inflation, resilient economy, hawkish Fed) remain. Lock risk remains elevated due to wide mortgage spreads and potential volatility from upcoming high-impact data. Leverage this period of consolidation to prepare for potential rate shifts driven by next week's economic reports, emphasizing the importance of staying informed and managing pipeline risk proactively.