Unemployment Not High Enough For a Full-Fledged Rally
Tue, Dec 16 2025, 2:42 PM
MBS Recap
Unemployment Not High Enough For a Full-Fledged Rally
MBS Recap Matthew Graham | 2:41 PM
Unemployment Not High Enough For a Full-Fledged Rally
If the only metric from this morning's jobs report was the uptick in unemployment from 4.4 to 4.6%, and if that was the last of this week's big ticket econ data, it wouldn't be a surprise to see a more aggressive rate rally. As it stands, unemployment was tempered by a higher participation rate and less dire unrounded numbers (taken together, these actually made unemployment closer to unchanged). Add in stronger payroll growth, a surge in core retail sales, and the need to wait and see how Thursday's CPI comes out, and the choppy, lackluster rally is easier to reconcile.
Modestly stronger after jobs report. MBS up almost an eighth and 10yr down 1.1bps at 4.165
09:27 AM
Paradoxically modestly weaker now with MBS unchanged and 10yr up 1.3bps at 4.191
12:56 PM
Back near best levels of the day. MBS up 5 ticks (.16) and 10yr down 2.1bps at 4.156
02:28 PM
Leveling off at only modestly stronger levels. MBS up an eighth and 10yr still down 2.1 ticks at 4.156
Lock / Float Considerations
Rates are no worse for the wear after Tuesday's jobs report, even if the improvement fell short of what we might expect given the uptick in unemployment. Risk averse clients may view this as suggesting some measure of resistance to the notion of any rapid improvement in rates between now and year-end. Pragmatists assume the market is waiting to consider bigger moves after Thursday's CPI data.
