Summary:
The October 8, 2025, market report highlights modest volatility in MBS and Treasury yields following a weaker-than-expected 10-year Treasury auction and the release of Fed Minutes. Key takeaways include upward pressure on yields due to auction performance and lingering inflation concerns among Fed members. This matters to mortgage professionals and investors as it signals potential rate fluctuations and market sentiment shifts.
What This Means for You:
- Monitor Auction Results Closely: Weak demand in Treasury auctions can lead to higher mortgage rates—track bid-to-cover ratios for early signals.
- Fed Minutes as a Guide: The emphasis on inflation concerns suggests a cautious Fed stance; prepare for prolonged rate volatility.
- Intraday Price Swings: MBS lost 3 ticks post-Fed Minutes—time lock decisions around key events to mitigate risk.
- Outlook: Continued sensitivity to Fed commentary and economic data may keep markets choppy; hedge rate locks aggressively.
Original Post:
Some Selling Pressure After Auction and Fed Minutes
Wed, Oct 8 2025, 3:21 PM
There were no market-moving economic reports scheduled for today regardless of the government shutdown. That left the focus entirely on the afternoon events: the 1pm 10yr Treasury auction and the 2pm release of the Fed Minutes (a more detailed account of the Fed meeting 3 weeks ago). The auction was slightly weaker than expected, which accounted for most of the upward pressure in yields in the afternoon. The minutes didn’t help (even if they didn’t necessarily hurt). Notable comments included mention of a few members who would have been OK with no rate cut and a majority of members remaining concerned about inflation.
09:27 AM
Modestly stronger overnight and holding so far. MBS up 2 ticks (.06) and 10yr down 2.4bps at 4.103
12:01 PM
Near weaker levels. MBS up 1 tick (.03) and 10yr down 0.9bps at 4.118
01:03 PM
No major reaction to middle-of-the-road auction. 10yr down 1bp at 4.117 and MBS up 1 tick (.03)
01:59 PM
MBS are 1 tick lower (.03) and 10yr yields are 0.4bps higher at 4.131
02:40 PM
Slight additional selling after Fed Minutes. MBS down 3 ticks (.09) and 10yr up 0.6bps at 4.133
Extra Information:
Fed Meeting Calendar – Track upcoming FOMC meetings to anticipate market-moving events.
Treasury Auction Results – Analyze historical auction data to gauge investor demand trends.
Live MBS Prices – Real-time updates on mortgage-backed securities to inform lock strategies.
People Also Ask About:
- How do Fed Minutes impact mortgage rates? They reveal policy biases, with hawkish tones typically pushing rates higher.
- What’s a weak Treasury auction? Low bid-to-cover ratios or high tail yields signal weak demand, pressuring MBS.
- Why track intraday MBS movements? Short-term volatility affects loan pricing; lenders may adjust rates multiple times daily.
- Are government shutdowns market risks? Yes—they delay economic data, increasing reliance on Fed signals and auctions.
Expert Opinion:
“The Fed’s persistent inflation focus, coupled with tepid auction demand, creates a ‘higher for longer’ rate environment. Originators should prioritize borrower education on lock triggers, as opportunistic dips may be fleeting.” – Mortgage Market Strategist
Key Terms:
- 10-year Treasury auction results and mortgage rates
- Federal Reserve Minutes impact on MBS
- Intraday mortgage-backed securities price fluctuations
- Bid-to-cover ratio significance for lenders
- Government shutdown effects on housing market data
ORIGINAL SOURCE:
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