Bond gains extend into a third consecutive session — UMBS 5.0 opens at 98.94, up 12 ticks from yesterday's close; 10yr Treasury yield slips to 4.336%; 30yr conventional rate holds at 6.44%
Bonds notched a third straight overnight gain. UMBS 5.0 opened at 98.94, adding 12 ticks on top of Wednesday's 52-tick surge. The 10-year Treasury yield pulled to 4.336%, shedding another 1.1 basis points from yesterday's close of 4.347%. The 30-year conventional rate holds at 6.44% — unchanged from where lenders ended Wednesday's session. The catalyst is the same one that's been driving the past two days: continuing reports of progress toward a Middle East ceasefire. Geopolitical optimism has kept oil prices lower, which softens inflation expectations and sustains demand for Treasuries and agency MBS.
Three consecutive sessions of bond strength is notable, but the character of today's move is different from Wednesday's. Yesterday's rally was a 52-tick gap — a sharp repricing on fresh news. This morning's 12 ticks are an extension, not a new leg. Markets have largely priced in the geopolitical improvement; each additional tick now requires either a confirmed deal or a new catalyst. The larger event arrives this afternoon: the FOMC statement, with Chair Powell's press conference to follow. Markets are priced for no rate change, but the statement language around inflation trajectory and labor market conditions will determine whether this morning's gains hold. With Core PCE at 3.2% and ADP showing 109,000 private jobs added in April, the Fed has sufficient data justifying patience — and a hawkish-leaning statement could push yields back up through the afternoon.
At 6.44%, the 30-year rate is 10 basis points off last week's highs and at its best level since early April. Two full sessions of gains have moved through most lenders' rate sheets; borrowers who quoted earlier this week are working with numbers that no longer reflect the market. If the FOMC statement is neutral — a hold with no strong signal in either direction — today's rate likely represents the week's floor. A statement that acknowledges tariff-driven uncertainty in the growth outlook could tilt dovish and push rates toward 6.35–6.40%. The downside risk is symmetric: any hawkish turn in the statement language, or a reversal in the Middle East headlines that drove this rally, could pull yields sharply higher through the afternoon session.
The Federal Reserve announces its rate decision today, with the statement expected around 2:00 PM ET and Powell's press conference at 2:30 PM. No change to the federal funds rate is expected. The market-moving element will be the policy language — specifically how the Committee describes the balance between inflation risk and growth risk. Any acknowledgment of tariff-driven economic headwinds could extend the bond bid into the afternoon. A statement emphasizing sticky inflation and labor market resilience would likely pressure rates higher before the close.
— David Burson, NetRate Mortgage