Mortgage Rates Hit One-Month Lows as Iran Peace Deal Materializes

Bonds rallied overnight on confirmation of a U.S.-Iran peace deal, pushing 30-year mortgage rates to 6.56% — their lowest level in exactly one month. UMBS 5.0 traded as high as 98.39 (+0.29) in the morning before gradual selling trimmed the gain; bonds closed at 98.28 (+0.18). Rates didn't fall as far as the headline might suggest because the market had already been pricing in the deal since last Thursday. The muted reaction is also partly caution ahead of Wednesday's FOMC meeting, where a hold is expected but a rate hike is back on the table. Weak economic data reinforced the bond-friendly tone: Empire State Manufacturing printed +5.7 vs. +14.0 expected, and Industrial Production came in at +0.1% vs. +0.3% expected.