Team Pruner Mortgage

Post Fed Day Market Update - Thursday, October 30, 2025 11am

Current Mortgage Rates Direction: Higher, off the lows from a week ago, but still near lows for the year.

Advise for our Clients: Lock short term... read on...

Current Price of FNMA 30-year 5.5% Bond: $101.16, 0bps

Today's Update:

“Another rate cut in December is not a foregone conclusion,” Fed Chair Powell said yesterday - and then the bottom fell out of both stocks and bonds.

This morning we are seeing the 3rd reaction to the Fed and it is so far a bit muted - with flat bond prices and slightly higher Treasury yields - both now testing key levels.

The statement wasn’t any market mover and came as expected with a quarter point cut and the halt to QT on December 1. But there were two opposite dissenters one wanting a 50bp cut and the other wanting no rate cut at all and the markets still shrugged that off.

However, along with his above words, Fed Chair Powell emphasized that there were strongly differing views within the Fed about how to proceed in December, that the central bank would carefully evaluate every scrap of incoming data as if “driving in the fog,” and that the Fed would eventually need to expand its balance sheet again to keep pace with the size of the banking system and the economy, signaling a cautious but hawkish stance on future policy.

So, all in all, it was a hawkish cut. a true Trick or Treat!

A hawkish Fed means the Federal Reserve is focused on fighting inflation, even if that means slowing the economy. When the Fed takes a hawkish stance, it’s signaling that interest rates may stay higher for longer—or even rise further—to keep prices under control. This often leads to higher borrowing costs and pressure on bonds and mortgage rates, as markets anticipate tighter financial conditions ahead.

On QT ending … It means it’s ending Quantitative Tightening (QT)—the process of shrinking its balance sheet by allowing Treasury and mortgage-backed securities to mature without replacing them. In plain terms, the Fed will stop pulling liquidity out of the system. This marks a notable shift in policy, suggesting officials believe financial conditions have tightened enough and that continuing QT could risk slowing the economy too much.

Before the meeting, the 10-year yield was 3.97% and closed at 4.05% and is now 4.08%. The FNMA 30-year 5.5% coupon traded at 101.47 and closed at 101.16. The Dow and S&P gave up their gains.

The first read on Q3 GDP and Weekly Claims were not released today and Core PCE will not be released tomorrow due to the ongoing government shutdown.

WTI oil is in the $60/bbl range. The Dow is up, S&P and Nasdaq are lower after Fed Chair Powell yesterday.

Fed commentary will resume but we don’t see any on today’s calendar.

Technical Outlook:

After the decline, the FNMA 5.5% is just above support at 101.00 failing to rise above stiff resistance at $101.50, a level it hasn’t traded above since September 2024. With the 10-year Treasury yield now at 4.08% - just below yield resistance at 4.105, with support at 4.00%. If 4.10% is broken - the 10-year will likely drift to 4.20%

The trend for both mortgage bonds and Treasury yields are testing key levels - watch carefully with us.

Guidance and Recommendations:

Continue to lock loans closing soon and get more ready to lock if mortgage bonds fall beneath $101 and the 10-year drifts above 4.10%. Watch key levels closely with us.

· Where are rates headed? Sideways and near best level of the year
· Why? Lower oil prices, QT ending.
· What’s next? No major economic reports, Fed speak.

Have a great Thursday!

Mason

Its FALL.. and RATES are FALLING!

Video from Mason Pruner - The Mortgage Firm Inc Video from Mason Pruner - The Mortgage Firm Inc