What Happened Last Week?
Underwhelming (but Friendly) Conclusion
Last week didn’t manage to offer nearly as much excitement as the previous few examples, but that’s not necessarily a bad thing considering yields/rates are near the lower boundary of their recent ranges. Friday looked like it may have been a higher rate day at the start of the session, but bonds arrested the selling trend and reversed course after dovish comments from Fed’s Waller. Europe’s close was also beneficial for US bonds, helping us get all the way back into modestly stronger territory before trading levels flat-lined into the U.S. close.
Source: Matthew Graham, Mortgage News Daily 6/20/2025)
What’s on the Agenda for This Week?
Three Things
The three areas that have the greatest ability to impact your backend pricing this week are: (1) Geopolitical, (2) Inflation Nation and (3) The Talking Fed.
(1) Geopolitical: This category will continue to be the main driver in the long bond market as the market reacts to this weekend’s U.S./Israel bombings in Iran as well as a preliminary vote in the Senate on the “Big Beautiful Bill”.
(2) Inflation Nation: The Fed’s key measure of inflation, Core PCE, will be on Friday. Will tariffs having an impact and is stagflation (high inflation, no growth) still a concern?
(3) The Talking Fed: This is a very heavy week of Fed Speak with Fed Chair Powell testifying twice this week.
- 06/23: Waller, Bowman, Goolsbee and Kugler
- 06/24: Powell, Hammack and Williams
- 06/25: Powell
- 06/26: Barkin, Hammack and Barr
- 06/27: Williams and Hammack
Treasury Dump
Here is this week’s Treasury note auction schedule.
- 06/24: 2-year
- 06/25: 5-year
- 06/26: 7-year
Market Wrap-up
Taking it to the House: Existing Home Sales in May were a smidge better than expected, 4.03M units versus estimates of 3.950M.
The Talking Fed: Fed Gov Michelle Bowman threw her hat into the ring for the next FOMC Chair by echoing fellow contender Gov Waller’s sentiment that July’s meeting is “live” by saying, “Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market.”
On Deck for Tomorrow: Fed Chair Powell, Case Shiller HPI and FHA Housing Price Index, 2-year Note auction and the Richmond Fed’s Manufacturing Index.