May 21st, 2025 9:22 AM by Richard Sardella MLO.100007700/NMLS 233568
The concerns about the deficit still hurting bonds this morning. Since Moody’s lowered the US debt rating, markets have grown more concerned about hte increasing cost to fund the debt. In the past when Fitch and other rating agencies lowered the rating the market reactions were short lived and quickly pushed back under the rug. This time there are key issues; the reconciliation bill working its way through Congress and the inflation fears from the tariffs. The bill is expected to increase budget deficits by about $3 trillion over the next decade. Currently traders and investors are not thinking about the potential debt relief that increased revenues from tariffs will bring, mostly because it can’t be quantified in any meaningful way.
Globally rates are also increasing, yields on German, Japanese and U.K. equivalents also rose. British borrowing costs rose especially after data showed inflation quickening. Japanese yields increased yesterday after a disappointing bond auction.
This morning stock bega indexes began lower. The 10 year note at 8 am ET 4.54% +5 bps, MBS prices -18 bps.
Weekly MBA mortgage applications declined last week. Application volumes in the US fell by 5.1% from the previous week for the period ending May 16th, the sharpest drop in one month. Purchase apps fell by 5%. Re-Fi apps also fell by 5%.
The Treasury will auction a 20 year bond at 1 pm.
At 9:30 am the DJIA opened -360, NASDAQ -92, S&P -33. 10 year at 9:30 am 4.54% +5 bp. FNMA 6.0 30 year coupon at 9:30 am -20 bps from yesterday’s close and -19 bps from 9:30 am yesterday. By 10 am MBS prices improved from -19 bps to -11 bps.
PRICES @ 10:00 AM
10 year note: 4.53% +4 bp
5 year note: 4.12% +5 bp
2 year note: 4.02% +4 bp
30 year bond: 5.00% +3 bp
30 year FNMA 6.0: @9:30 am 100.46 -20 bp (-19 bp from 9:30 am yesterday)
30 year FNMA 6.5: @9:30 am 102.30 -19 bp (-18 bp from 9:30 am yesterday)
30 year GNMA 6.0: @9:30 am 100.58 -2 bp (+7 bp from 9:30 am yesterday)
Dollar/Yen: 143.83 -0.68 yen
Dollar/Euro: $1.1332 +$0.0048
Dollar Index: 99.59 -0.53
Gold: $3,307.20 +$22.60
Bitcoin: 106,809 -252 (high today 108,000)
Crude Oil: $62.44 +$0.41
DJIA: 42,346 -332
NASDAQ: 19,082 -61
S&P 500: 5911 -29
Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.