Bonds gave back an overnight gain and closed at the week's weakest levels — 10-year at 4.738%, up 3.6 basis points, with the 30-year fixed drifting a penny higher to 6.77%.

The day was a one-way round trip. Bonds opened the overnight session stronger, with the 10-year at 4.688% and down nearly two basis points, then sold steadily from mid-morning on: 4.716% at 9:29 AM ET, 4.729% by 10:34, 4.741% by early afternoon, and 4.738% at the close. That is a 5.3 basis-point swing from the overnight low to the intraday high on a Friday with no meaningful data on the calendar. UMBS 5.5 finished at 99.11, down 14 ticks, with the 6.0 coupon at 101.23, down 10.

The shape of the selloff says more than its size. The 2-year rose 3.8 basis points, the 10-year 3.6, and the 30-year only 2.9 — the front end led and the curve flattened. That is the signature of a shift in near-term Fed expectations, not a supply or term-premium story, and it is the mirror image of Wednesday's buyback-driven steepener. Two sessions later, that move has been fully unwound and yields are back where they started the week. Thin summer participation amplifies a day like this: with fewer traders on the desk, a modest repositioning moves more than it would in September.

For borrowers, a penny on the 30-year fixed is not a change in the picture. The mid-6s remain the range, and the week's entire arc — rally Wednesday, reversal Thursday, drift higher Friday — netted out to roughly nothing. Next week actually carries weight: PCE inflation on Wednesday, August 26, the Fed's preferred measure of whether inflation is cooling, alongside the Fed's annual Jackson Hole conference. After that, the September jobs report on September 4, CPI on September 11, and the FOMC meeting on September 16.

— David Burson, NetRate Mortgage