Good morning!

We’re waking up to a bond market that’s calm but coiled ahead of tomorrow’s Fed decision. The 10-Year Treasury is hovering right at the 4% pivot (~3.99%), with traders leaning heavily toward a quarter-point cut and waiting on Chair Powell’s tone to decide the next leg. Equity futures are mixed after a strong Monday, gold is softer, and the yield curve is little changed—classic “pre-FOMC pause.” For housing, that 4.00% line on the 10-Year remains the fulcrum: sustained time below it invites gentler mortgage pricing and better lock windows; a rebound above it can quickly sap lender appetite and nudge rate sheets higher. Big picture: cooling inflation, a still-resilient labor backdrop, and building optimism around US-China talks are improving risk sentiment. If the Fed confirms a “cut and calibrate” stance, we could carry a constructive rates tone into November—exactly the kind of backdrop that re-energizes pre-approved buyers and rate-sensitive fence-sitters.

Treasury & MBS Check

• 10-Year: 3.993% (≈ flat, dancing around 4.00%)

• 2-Year: ~3.50% (up a touch)

• 30-Year: ~4.56% (down ~1bp)

Bonds are range-bound, with the 4.00% handle still the psychological pivot. Futures imply a ~98% chance of a 25bp cut to 3.75%–4.00% tomorrow. Tone > move: Powell’s guidance will likely drive whether the 10-Year holds a “3-handle” into month-end.

Mortgage Rates (MND Daily Survey)

Rate sheets are steady into the Fed. Expect quick reprices tomorrow afternoon once the statement and presser hit.

Why Bonds Are Quiet / What Moved Them

• Expectation set: Markets have “pre-cut” the curve; CPI came in softer, and hiring has slowed at the margin—both supportive of easing.

• Data blackout: The ongoing government shutdown has limited official data, keeping traders tethered to the Fed and high-frequency reads.

• Event risk ahead: Powell’s post-decision remarks (balance sheet path, appetite for additional cuts) are the swing factor.

Today’s Calendar (Rates-Relevant)

• Conference Board Consumer Confidence (Oct)

• Regional Fed activity updates

• Earnings heavyweights across payments/logistics/travel that can sway risk appetite (Visa, PayPal, UPS, Booking, etc.)

What This Means for Rate Sheets

• Bullish path: A cut + balanced tone → 10-Year sustains <4.00% → modest improvements (especially gov/VA/FHA coupons).

• Bearish path: Any hint of “one-and-done” or pushback on December → 10-Year re-tests 4.10–4.15% → eighth to quarter-point worse on rate sheets.

• MBS spreads: Reasonably tight; pricing should track Treasuries closely on the first move.

Lock/Float Playbook

• Closings ≤15 days: Lock. Fed-day whipsaws are common. Protect gains.

• 30–45 days: Float, but be nimble. Set alerts around a 3.95%/4.05% 10-Year break.

• Refi prospects: Pipeline watch week. Use any post-Fed dip to trigger targeted outreach.

Talking Points for Clients & Agents

• “The 10-Year is hugging 4.00%. A clean break lower after the Fed could bring meaningful pricing tailwinds.”

• “Inflation has cooled enough for a likely cut, but the tone on future moves matters most for mortgage rates.”

• “Even a small rate improvement can boost buying power—on a $400K loan, a 0.125% rate drop can trim the payment by $30–$40/month (taxes/insurance excluded).”

Quick Coaching Tip

Pre-write two text templates for Wednesday afternoon:

1. If rates improve: “Good news—bond yields dipped post-Fed. Want me to run updated numbers and hold a rate if it fits your budget?”

2. If rates worsen: “The Fed’s tone lifted yields. I’ll watch for the next dip; want me to set an alert at your target payment?”

The Bottom Line

 We are stepping into a potentially favorable stretch for borrowers. With the 10-Year Treasury holding near 4% and the Fed expected to cut rates tomorrow, even a slightly positive message from Chair Powell could push yields back into the 3% range—translating to lower mortgage rates. If that happens, lenders will likely sharpen pricing through early November. Combine that with improving U.S.–China trade sentiment and steady market confidence, and this week could open the door to stronger buying power and better lock opportunities. Stay alert and ready to act if rates dip after the Fed meeting.