Yesterday's bond rally is giving back ground. The 10-year Treasury yield is at 4.698% this morning — up roughly 6 basis points from Wednesday's close of 4.639% — as oil prices climb and reintroduce the inflation pressure that briefly let up this week.

Wednesday was a good day. Treasury announced it would expand its bond buyback program from $2 billion to $4 billion for 10-to-30-year maturities, and that liquidity injection drove a sharp morning rally — the 10-year fell more than 6 basis points at its best levels. The FOMC Minutes came out at 2:00 PM Eastern and passed without disruption. By the close, the 10-year was down 6.7 basis points and rate sheets improved to 6.72%, the first decline after three consecutive days of increases.

Today, oil is back in the driver's seat. Rising energy prices keep inflation expectations from falling, which means the Fed holds rates higher for longer, which means bond investors demand more yield to compensate. The buyback program that drove Wednesday's rally is a real tool — a Treasury Department liquidity operation that's been running since 2024 — but it's plumbing, not policy. When oil moves, it moves faster than plumbing. Six basis points of giveback erases most of Wednesday's gain and puts the 10-year back at the top of the range it's been trading in all month.

For borrowers, the picture is unchanged: rates in the mid-6s are available, but nothing is pulling them decisively lower right now. The next durable move requires softer economic data — a jobs number that undershoots, a CPI print that surprises to the downside — or a clear signal from the Fed that the tightening cycle is complete. Neither is on today's calendar. If you're within 30 days of closing, the cost of floating for a 10-to-15 basis point improvement is real: rate-lock fees, timing risk, and the lag between bond improvement and lender repricing all work against you. If you have flexibility, keep watching the data.

— David Burson, NetRate Mortgage