What Happened Last Week?
Uneventfully Sideways at Modestly Weaker Levels
Friday ended up being the least interesting day of the week although it did manage to offer some hope that the post-Fed selling spree has found a limit. Bonds were just a bit weaker in the overnight session but opening levels were roughly in line with Thursday’s weakest levels (so no real additional selling in daily terms). In addition, the opening levels served as support that offered several bounces throughout the day in Treasuries (4.14% in 10-year yields, e.g.). Some would consider such things to be early evidence of the market finding its footing after 2 days of selling. Ultimately, though, bigger moves remain dependent on econ data. This week is fairly light in that regard, but the plethora of Fed speeches could help balance the hawkish takeaway from last week’s Powell press conference.
Source: Matthew Graham, Mortgage News Daily 9/19/2025)
What’s on the Agenda for This Week?
Overview
This is a big week for Fed Speak.
Three Things
The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) Inflation Nation, (2) The Talking Fed and (3) Geopolitical.
(1) Inflation Nation: The Fed’s official measure of inflation, PCE, will be on Friday. The bond market will be very sensitive to both the headline and core readings on a MOM basis versus the consensus estimates.
(2) The Talking Fed: Fresh off of last week’s FOMC rate cut, there is deluge of Fed Speak this week, including Fed Chair Powell:
- 09/22: Williams, Musalem, Hammack, Barkin and Miran
- 09/23: Bostic and Powell
- 09/24: Schmid, Williams, Bowman, Bar and Daly
- 09/25: Barkin and Bowman
(3) Geopolitical: September 30th and a potential U.S. government shutdown is fast approaching.
Treasury Dump
There is a round of shorter-term debt hitting the marketplace this week:
- 09/23: 2-year note
- 09/24: 5-year note
- 09/25: 7-year note
Market Wrap-up
The Talking Fed: Newly appointed Federal Reserve Governor Stephen Miran said, “I view this policy as very restrictive, and I believe it poses material risk to the Fed’s employment mandate. And I believe the appropriate funds rate is in the mid 2% area, almost two percentage points lower than the current policy…Leaving short-term interest rates roughly 2 percentage points too tight risks unnecessary layoffs and higher unemployment.”
On Deck for Tomorrow: Fed Chair Powell, 2-year Treasury note auction, Richmond Fed Mfg Index.