Treasury yields continued lower into midday, but UMBS 6.0 gave back the morning's gains — rates are holding near the highest levels in about three years.

By midday, the 10-year Treasury had pushed to 5.275% — another 2.4 basis points better than the 10 AM Eastern print — but UMBS 6.0 slipped back from 97.88 to 97.78, erasing the morning's 10-cent gain and returning to yesterday's close. Treasuries rallying while mortgage bonds lag is a spread-widening signal, often a sign that secondary market buyers are staying cautious even as the rate picture softens slightly. The 3-year Treasury auction passed at 1:00 PM Eastern without apparent disruption (yields kept improving), but MBS didn't follow.

For borrowers, the 30-year conventional rate has edged to 7.56% from this morning's 7.61% — a real improvement of 5 basis points, though rates remain near the highest in about three years (late-2023 saw peaks near 7.8–8%, so today's print is elevated but not a generational high). The near-term pivot point is Wednesday's FOMC minutes at 2:00 PM Eastern. The Fed is on hold, but the minutes will show how seriously the committee discussed further rate hikes — that debate is not resolved, and the outcome shapes how much pressure stays on long-end yields through the rest of the week. Lock-leaning for borrowers with no strong conviction.

— David Burson, NetRate Mortgage