30yr rate closed at 6.67%, down 1 basis point on the day. UMBS 5.0 finished at 97.54, off 21 bps from Tuesday's close.

The day's arc was straightforward: a brief morning lift, then a slow grind lower. UMBS 5.0 touched 97.78 after CPI came in line with expectations — the "no upside surprise" response that bonds tend to give when a feared number simply lands where it was expected. That was the high. From there, the session was a steady drift. By midday, MBS had given back most of the early gains. The afternoon extended the selling, and bonds closed near session lows at 97.54. The 10yr Treasury ended at 4.555%, up 3.6 bps on the day.

What the numbers describe is a market with no catalyst for a rally. CPI at 4.2% — a three-year high — was absorbed, not welcomed. The bond market didn't panic, but it didn't reward holders either. After the initial relief faded, the macro backdrop reasserted itself: elevated inflation, strong employment, no credible case for rate cuts in the near term. That's a ceiling, not a floor. Rates held at 6.67% because lender pricing absorbed some of the MBS loss rather than passing it through — but the underlying pressure was down all afternoon.

Thursday brings PPI. The FOMC meets next week. Nothing in today's close gives the Fed a reason to shift tone.

— David Burson, NetRate Mortgage