Bonds closed where midday left off — UMBS 5.0 finished at 98.29, up 29 basis points on the day. 30-year rate closes at 6.58%, 4 bps better than yesterday.

The afternoon session gave up nothing. That's the headline for today: a market that absorbed a Fed hold, a new Fed chair announcement, and a trade deal signing — and came out 29 basis points higher in MBS by the close. The 10-year Treasury finished at 4.436%, down 6 bps on the day, confirming the bond market made its peace with Warsh and moved on. Post-Fed selloffs that reverse this cleanly inside 24 hours tend to stick.

6.58% is still not a low rate, but the trend line off this week's worst levels is constructive. Borrowers who floated through the Fed volatility came out ahead today. The question heading into next week is whether this stability gives way to a test of 4.40% on the 10-year — or whether equity strength pulls capital back out of bonds. Calendar is light tomorrow, so today's close should hold as the baseline.

— David Burson, NetRate Mortgage