Good Morning and Happy Monday!

We’re kicking off the week with some long-awaited optimism in both the economic markets and Washington. Treasury yields are edging higher this morning as signs emerge that the historic government shutdown—stretching 40 days and counting—may finally be nearing an end. The Senate cleared a key procedural hurdle late Sunday night, with bipartisan support signaling momentum toward a temporary funding deal through January. While the agreement still needs approval from the House and a signature from President Trump, the bond market is already reacting with cautious relief.

This sense of progress is helping risk appetite return to the markets. Stock futures are solidly in the green, tech is rebounding from last week’s pullback, and bond prices are slipping slightly as yields tick higher. While investors remain in a data vacuum—thanks to the shutdown halting key reports like CPI, PPI, and jobs data—the broader tone has turned hopeful that the logjam will soon break.

Treasury & MBS Check

The 10-year Treasury is holding near 4.13%, up roughly 3–4 basis points this morning, while the 2-year yield sits at 3.59%. The modest rise reflects renewed confidence that the shutdown’s resolution will bring back economic data releases—and with them, market clarity. Traders are also positioning ahead of remarks from several Fed officials this week, which may shed light on the likelihood of a December rate cut (currently priced at around 66%).

Mortgage Rates (MND Daily Survey)

Rates are holding steady in the low 6s for most fixed products, still offering buyers a strong window to lock before volatility returns. With spreads tightening slightly, lenders may gain room to improve pricing if Treasury yields stabilize near this 4.10–4.15% range.

Why Bonds Moved

Bonds sold off slightly as investors rotated back into equities, encouraged by progress in Washington and better-than-feared global sentiment. The S&P 500 futures are up 0.86%, and the Nasdaq futures have surged 1.36% in early trade. Optimism that the shutdown is nearing its end reduces the demand for safe-haven assets like Treasuries, pushing yields modestly higher.

Meanwhile, the Fed remains in “data blackout mode”—not by choice, but due to the shutdown’s suspension of key economic reports. That lack of data will make upcoming Fed speeches especially important, as policymakers must rely on anecdotal signals rather than official numbers to guide their December rate decision.

Lock/Float Playbook

• Loans closing in 30 or less days: Lock now. There’s limited upside and modest risk if yields drift higher.

• Loans closing in 30+ days: Float carefully. If shutdown headlines turn negative or Fed remarks sound more dovish, the 10-year could dip back toward 4.00%.

• Refinance opportunities: Stable rates + high equity = strong call window. Encourage borrowers to act before volatility returns with the data deluge post-shutdown.

Talking Points for Clients & Agents

• “We’re seeing steady rates in the low 6s, even as markets start the week on a positive note.”

• “Bond yields are rising slightly because investors expect a government deal soon—once that happens, we’ll finally get the economic data that’s been frozen for over a month.”

• “A December Fed rate cut is still on the table, but for now, stability is the key theme—great time for buyers to make a move.”

Today’s Calendar

• No major economic data releases (shutdown-related delay)

• Fed Speakers: Several officials expected to give remarks this week—watch for tone around inflation and rate cuts.

• Earnings: Tyson Foods, Occidental Petroleum, Rocket Lab, and Paramount Skydance report today.

Bottom Line

Markets are opening this week with a sense of cautious optimism. The 10-year Treasury hovering near 4.13% is a healthy sign that stability may be returning to the bond market, even without the full slate of data. If Washington finalizes a deal this week, expect a short-term wave of volatility as the backlog of reports hits the wires—but that could also unlock opportunities for a renewed bond rally if inflation data confirms continued cooling.

For now, this is the sweet spot we’ve been waiting for: steady rates, renewed confidence, and a potential path to clarity. Keep your clients informed, your locks strategic, and your mindset upbeat—because when markets turn from uncertainty to momentum, that’s when loan officers lead the way.