We’re two days into the 4th quarter of the 2025, two days into another government shutdown, and… companies are relishing their September numbers. I have been hearing from a few companies that had strong performance in September. For example, Union Home Mortgage has been in the news lately, and the company had a record lock month with over 5,000 units and $1.67 billion over all channels. As we noted here a couple of weeks ago, UHM announced the acquisition of the origination assets of Sierra Pacific, whose lock volume totaled $521 million for the month, so combined that puts UHM with a total of $2.18 billion. (The asset acquisition, led by STRATMOR, became official on October 1st.) Residential lending is always changing, and in The Big Picture, today at noon, PT, Dustin Owen, host of The Loan Officer Podcast, will touch on the potential for Fannie and Freddie re-public offerings, explore how the Trump Administration and FHFA could shift the landscape, and dig into hot-button topics like LO comp, and increasing non-QM production. (Today’s podcast can be found here and this week’s are sponsored by Spring EQ, one of the nation’s leading non-bank home equity lenders, giving partners more ways to serve customers. Known for speed, service, and innovation, Spring EQ makes tapping into home equity easier. Hear an interview with AHMC’s Matthew VanFossen on his new role as Chair of State and Local for MBA, key agenda items, and how people can get involved with advocacy.) Services, Products, Software, and Tools for Lenders and Brokers

Although the present week brings the release of PCE inflation for August, and although PCE is the most relevant inflation data when it comes to assessing progress toward the 2% target, we still wouldn’t consider this a high-consequence data week. Part of the reason is that PCE almost never hits as hard as CPI because it comes out two weeks later and has less surprise potential due to preceding reports. The other part of the reason is that the Fed and the market are both more focused on the evolving employment landscape when it comes to guiding the next big step for rates. As such we drift between jobs report and jobs report, waiting to see what the next big cue will be. In the meantime, placeholder weeks–such as this one–account for in-range volatility. If there’s a focus, it’s the massive deluge of Fed speakers. Their comments will help clarify and perhaps push back against last week’s hawkish takeaway to Fed Chair Powell’s press conference. 

Focusing only production MBS coupons and longer-term Treasuries, the bond market is off to another slow, sideways start today with minimal change versus yesterday.  With all of this morning’s data now reported, we’ve seen no measurable impact on bonds.  The overnight session was a different story but not due to econ data.  Rather, bonds responded to Trump’s firing of Fed Governor Cook (a process that is more complicated than it sounds) with a steepening of the yield curve (2yr yields moved lower versus 10yr yields). The steepening is consistent with the view that Cook’s replacement would be that much more supportive of an aggressive rate cut outlook (2yr Treasuries have more in common with the Fed Funds Rate than 10yr Treasuries). This isn’t a major shift in the bigger picture and it remains to be seen how Cook’s firing will actually play out.

Last week may have ended on a high note with bonds rallying on Powell’s Jackson Hole speech, but perception was better than reality at the time. The reality was/is that Friday’s rally merely reinforced the trading range that has been ongoing since the August 1st jobs report. At the present pace and considering the econ calendar in the week ahead, we could be waiting for next jobs report before seeing a meaningful challenge to that range (roughly 4.20-4.35 in 10yr yields). This week’s key event is Friday’s PCE inflation. Even if it doesn’t tend to move markets as much as other reports, it’s important confirmation.  It’s also worth more to the Fed when it comes to making a September rate cut decision.