Uneventful Drift Ahead of Friday's Monthly PCE Data

Uneventful Drift Ahead of Friday's Monthly PCE Data

For the 3rd day in a row, the bond market logged a rather uneventful trading session ending with minimal change versus the previous trading day.  All this despite the presence of several economic reports and Treasury auctions. If there was any reaction to this morning's data, it was slightly bond-friendly, but not enough to say it was anything other than random. The 7yr auction was a non-event, and stocks failed to offer any of the recent sort of spillover that has frequently made its way into the bond market. From here, the week's last big chance/risk of volatility is Friday morning's monthly PCE data.

Market Movement Recap
09:06 AM

Weaker overnight but improving after data.  MBS up 1 tick (.03) and 10yr up half a bp at 4.358.

01:04 PM

No major reaction to 7yr auction.  MBS down 1 tick (.03) and 10yr up 1.6bps at 4.368

03:21 PM

Sideways still.  MBS down 1 tick (0.03) and 10yr up 2.1bps at 4.374

Latest Video Analysis

Uneventful Drift Ahead of Friday's Monthly PCE Data

MBS & Treasury Markets
UMBS 5.5 99.49 +0.01 10YR 4.345% -0.017% 3/28/2025 1:11AM EST
If you're just joining us, here's a brief history of the last few decades as it concerns inflation and interest rates. Inflation was an overblown concern among market participants who were scarred by the early 80s. It consistently failed to matter or materialize until 1980s style hyperinflation came roaring back post-covid. Since then, inflation data is once again a top tier market mover and the PCE price index is the most important of the 3 main government price indices. But...   READ MORE
Today's Mortgage Rates
30YR Fixed 6.82% +0.02% 15YR Fixed 6.24% +0.02% 3/27/2025
With the exception of Monday, which saw a medium-sized uptick in mortgage rates , the rest of the week has been fairly calm in terms of volatility. Unfortunately, the low-volatility movement has been exclusively higher in rate and it's starting to add up.  In fact, as of today, the top tier conventional 30yr fixed rate is at the highest level in just over a month.  There was nothing special about today that led to that reality. It was just another day with minima...   READ MORE
Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Mar 28
8:30AM Feb Personal Income (%) Feb 0.4% 0.9%
8:30AM Feb Core PCE (m/m) (%) Feb 0.3% 0.3%
8:30AM Feb Core PCE Inflation (y/y) (%) Feb 2.7% 2.6%
8:30AM Feb Inflation-Adjusted Spending (Consumption) (%) Feb 0.5% -0.2%
8:30AM Feb PCE (y/y) (%) Feb 2.5% 2.5%
8:30AM Feb PCE price index mm (%) Feb 0.3% 0.3%
10:00AM Mar U Mich conditions Mar 63.5 65.7
10:00AM Mar Sentiment: 1y Inflation (%) Mar 4.9% 4.3%
10:00AM Mar Sentiment: 5y Inflation (%) Mar 3.9% 3.5%
10:00AM Mar Michigan Consumer Expectations Final Mar 54.2 64.0
10:00AM Mar Consumer Sentiment (ip) Mar 57.9 64.7
12:15PM Fed Barr Speech
1:00PM Mar/28 Baker Hughes Total Rig Count Mar/28 593
1:00PM Mar/28 Baker Hughes Oil Rig Count Mar/28 486
3:30PM Fed Bostic Speech
Monday, Mar 31
9:45AM Mar Chicago PMI Mar 45.4 45.5
10:30AM Mar Dallas Fed Manufacturing Index Mar -8.3
11:30AM 52-Week Bill Auction (bl) 68
11:30AM 26-Week Bill Auction (bl) 76
11:30AM 6-Month Bill Auction 4.085%
11:30AM 3-Month Bill Auction 4.190%
12:00PM 2025 Prospective Plantings - Corn (%) 2025 90.036M
12:00PM 2025 Prospective Plantings - Soy (%) 2025 86.51M
12:00PM 2025 Prospective Plantings - Wheat (%) 2025 47.498M
12:00PM 2025 Prospective Plantings - Cotton (%) 2025 10.673M
12:00PM Mar Quarterly Grain Stocks - Corn Mar 12.074B
12:00PM Mar Quarterly Grain Stocks - Soy Mar 3.1B
12:00PM Mar Quarterly Grain Stocks - Wheat Mar 1.57B
Read My Latest Newsletter
Interest rates improved fairly steadily throughout the week with the biggest drop seen after Wednesday's Fed announcement. The Fed didn't cut rates, nor was any rational person expecting them to at this meeting.  So why did rates move lower? First off, we have to specify the rates in question. The Fed only sets the Fed Funds Rate whereas mortgage rates (and most other rates) are determined... READ MORE