UMBS 5.0 picks up 17 basis points this morning to 98.39 while the 10-year Treasury eases to 4.446% — the first bond market improvement of the week after consecutive sessions of inflation-driven pressure pushed the 30yr conventional rate to 6.57%.

Bond markets are opening Thursday with a constructive tone. UMBS 5.0 is at 98.39, up 17 basis points from Wednesday's open of 98.13. The 10-year Treasury is at 4.446%, about 2 basis points below where it ended yesterday. The 30yr conventional rate is quoted at 6.57% — a tick above Wednesday's close — though rate sheets should reflect the bond market improvement as lenders reprice through the morning session.

This week's inflation data set the context. The April CPI came in at 3.8% annually — the highest reading since May 2023 — and producer prices accelerated further. Those prints pushed rates to their highest level in six weeks and raised market debate about the Fed's next move. Thursday's muted but positive open suggests the market has absorbed that data rather than extended the selloff. A 17-basis-point MBS recovery isn't a reversal; it's traders acknowledging that the inflation prints were bad but not catastrophic. The Senate's confirmation of Kevin Warsh as the incoming Fed chair adds a policy-uncertainty variable that markets are still in the process of pricing.

For buyers and refinancers watching rates this week, the bond improvement doesn't move the needle materially — 6.57% is still near the high end of the past six weeks. Borrowers floating today have a better environment than Wednesday morning, but the underlying driver hasn't changed: inflation above 3.5% leaves little room for the Fed to ease, and that ceiling on rate relief is real. Retail sales data lands today; a soft reading would give bond bulls a second catalyst to push yields lower and could produce rate sheets 5–10 basis points better by end of day. A strong print would likely erase the morning gains.

— David Burson, NetRate Mortgage