Bonds finished Friday with modest gains — UMBS 5.0 at 97.59 (+0.08), 10-year Treasury at 4.559% (-0.011%) — capping a week that ended roughly where it started despite heavy intraday volatility.

The week's story was headline-driven: Iran peace negotiations dominated every session, with bonds rallying on ceasefire signals and fading when those signals fell apart. Friday was a compressed version of that same pattern — up hard at the open on news that Pakistan's army chief was en route to Tehran, down sharply by mid-morning when reports said he never left Pakistan, then stabilizing into the 2pm Memorial Day close. The Freddie Mac weekly survey came in at 6.51%, confirming the week-over-week flat story.

Consumer sentiment hit 44.8 for May — worse than the 48.2 forecast and continuing a sharp deterioration — with 1-year inflation expectations rising to 4.8% and 5-year expectations to 3.9%, both above forecast. The Conference Board's Leading Index surprised in the other direction, printing +0.1% vs. a -0.2% forecast. Mixed signals, consistent with a market that doesn't know which story to price.

Markets are closed Monday for Memorial Day. Tuesday opens cold — whatever happens over the weekend in Iran negotiations, in bond auctions, or in the geopolitical backdrop will hit the market at once. Rate sheets reopening Tuesday are the first read.

For anyone with a pending rate decision: today's 6.65% read is not a new low. The week was a push. If the math works at today's pricing, don't hold for a cleaner entry point that may not arrive.

— David Burson, NetRate Mortgage