Good Morning!

The bond market is holding remarkably steady this morning, with investors taking a deep breath before Friday’s much-anticipated inflation data. After several months of volatility, it’s a welcome pause — almost like the calm before a big wave. The 10-year Treasury yield is sitting just below the 4.00% mark at 3.96%, and the 2-year is near 3.45%, both virtually unchanged overnight. That stability is helping mortgage rates inch lower, which is exactly what we’ve been hoping to see as we head into the final stretch of October.

Even though Washington’s government shutdown continues to cloud economic visibility, the market has found its footing in expectation of cooler inflation numbers. The thinking on Wall Street is that the upcoming CPI print will give the Fed the green light to cut rates more meaningfully, possibly as soon as late October. If that happens, we could see the 10-year Treasury break decisively below 3.90% — the technical level that traders are watching closely — and mortgage pricing could improve even further.

Treasury & MBS Check

The 10-year remains just below its key resistance of 4.00%. A sustained move under that mark would likely pull mortgage-backed securities (MBS) yields lower as well — a bullish sign for rate sheets.

Mortgage Rates (MND Daily Survey)

Mortgage rates are now at their lowest levels in over a month, with some lenders quoting the best terms seen in more than a year. Refinance applications are up 81% from this time last year, signaling that homeowners are jumping back in to capture these savings opportunities.

Why Bonds Are Calm Today

The market is in “wait-and-see” mode. With the CPI report delayed due to the shutdown, traders are relying on expectations rather than hard data. The consensus is that inflation is easing gradually, and unless Friday’s report surprises to the upside, the Fed has a green light to start a more aggressive easing cycle. The quiet tone in Treasuries reflects cautious optimism — investors are betting that rate relief is coming, but no one wants to get ahead of the Fed.

What This Means for Rate Sheets

If the 10-year Treasury continues to hover below 4.00%, we could see modest intraday improvements from lenders. However, if it creeps back above 4.10%, we’ll likely see slight pricing pullbacks. For now, the tone remains positive — and refinances are once again a real opportunity for borrowers who missed the last dip.

Lock / Float Playbook

• Closing in ≤ 30 days: Lock — protect the gains, rates are already near the best levels in weeks.

• Closing in plus 30 days: Float cautiously — CPI could give us another small improvement.

Talking Points for Clients & Agents

• “Rates have fallen to their lowest point in over a month — and some lenders are quoting the best terms in more than a year.”

• “Refinance activity is up over 80% compared to last year, which means homeowners are starting to take advantage again.”

• “If inflation comes in cooler on Friday, we could see another bump lower in mortgage rates.”

• “For buyers, waiting could mean opportunity — but if you’re already in contract, locking now locks in peace of mind.”

Today’s Calendar

• MBA Mortgage Applications (already out — down 1.8% last week)

• Corporate Earnings: Tesla, IBM, Hilton, AT&T, Boston Scientific, and more

• No major Fed speakers due to the data blackout

Bottom Line

Bonds are catching their breath — and that’s a good thing. The 10-year Treasury is holding just under 4.00%, giving mortgage rates room to drift lower as the market builds confidence that inflation is truly cooling. Refinance demand is exploding, purchase activity remains steady, and the tone in the secondary market is quietly bullish.

While we’re not out of the woods yet, the market feels balanced and optimistic — a refreshing change after months of chop. If Friday’s CPI confirms the disinflation story, we could be looking at a powerful tailwind for both rates and housing heading into November. Keep your conversations positive: momentum is shifting our way.