Good morning. 

We’re kicking off a pivotal week for markets — one that’s shaping up to be both high-stakes and opportunity-rich. Treasury yields are inching higher ahead of Wednesday’s Federal Reserve meeting, where nearly everyone expects a long-awaited rate cut. Add in record-setting stock indexes, a calmer inflation backdrop, and the upcoming Trump–Xi summit in South Korea, and it’s fair to say markets are waking up in a mood that’s cautiously optimistic. For mortgage professionals, this week could mark the start of a new chapter in rate direction — one that might open the door to stronger buying sentiment through the end of the year.

Treasury & MBS Check

• 10-Year Treasury: 4.02%

  

  +0.03

• 2-Year Treasury: 3.50%

  

  +0.02

• 30-Year Treasury: 4.61%

  

  +0.02

The 10-Year has been hovering just above the psychologically important 4.00% pivot, a level that continues to anchor bond traders’ expectations heading into the Fed’s decision. The slight uptick in yields this morning reflects investors repositioning ahead of the policy statement and the potential for Fed Chair Powell to sound neutral rather than dovish.

Mortgage Rates (MND Daily Survey)

Rate sheets remain remarkably stable given the crosswinds, with lenders waiting for the Fed’s move before repricing meaningfully. A sustained break below 4.00% on the 10-Year would likely spark moderate improvements in mortgage pricing midweek.

Why Bonds Are Quiet

After last week’s cooler-than-expected CPI report, inflation fears have eased, and the market’s base case is now a 25-basis-point rate cut to the 3.75–4.00% range. Deutsche Bank analysts expect Powell to keep future guidance vague — focusing on balance sheet policy rather than forward rate commitments. That uncertainty is keeping yields range-bound for now, though traders are clearly leaning toward a more accommodative Fed into year-end.

This Week’s Catalysts

• Wednesday: Fed rate decision + Powell press conference

• Thursday: Trump–Xi meeting during APEC Summit in South Korea

• Friday: PCE inflation, personal income/spending, and employment cost data

In addition to the Fed, it’s an earnings bonanza — Microsoft, Amazon, Apple, Alphabet, and Meta all report this week. Their forward guidance could dictate not only equity momentum but also long-term investor appetite for risk — and that flows directly into Treasury demand.

What This Means for Rate Sheets

If the 10-Year drops under 4.00%, expect modest intraday improvements and stronger pricing into midweek. Conversely, a rebound toward 4.10–4.15% could pull rates back by an eighth or more. Mortgage-backed securities spreads remain tight, so pricing should move quickly with Treasury direction.

Lock/Float Playbook

• Closing in 0–15 days: Lock — volatility is coming midweek.

• Closing in 30+ days: Float cautiously — odds favor a better entry after the Fed.

• Refi shoppers: Great time to position for rate improvements; a second cut in December could open even better windows.

Talking Points for Clients & Agents

• “This week could be the start of a new downward trend in rates — the Fed is expected to cut for the second time this year.”

• “Markets are stabilizing with inflation cooling and confidence building — a combination that’s historically good for real estate.”

• “Even small rate drops can unlock major affordability gains — a 0.25% cut typically saves buyers $125–$150/month on a $400K mortgage.”

Quick Coaching Tip

When rates are moving, clarity equals confidence. Use phrases like:

“We’re watching the bond market closely — the Fed’s expected cut this week could give you a chance to buy at better terms before demand rebounds.”
This language both educates and positions you as the trusted guide in uncertain times.

The Bottom Line

Momentum is quietly shifting in favor of buyers and borrowers. The combination of softening inflation, global trade progress, and a likely Fed rate cut on Wednesday positions the mortgage market for a calmer and potentially more favorable rate environment heading into November. While yields are slightly higher today, this early-week move feels like positioning — not panic. If the Fed confirms that rate cuts are back in play and Powell’s tone stays constructive, we could see the 10-Year reclaim a 3-handle before long. Stay alert, stay optimistic, and remember — opportunity loves preparation.