This is Matt Graham with the MBS Live market update. Last week was largely uneventful with the exception of the GDP release for Q3. It came in much stronger than expected at 4.3% versus the 3.3 forecast, but there were caveats, that the series in general has been volatile and we’re not looking at an entire year’s worth of data and when the numbers come together for the year over year reading. Analysts expect it to be a bit below 4.3. Nonetheless, the market reacted forcefully initially this was definitely exacerbated by the thin liquidity and low volumes associated with these holiday trading weeks. 10 year yields rose from roughly 4.15, almost all the way to 4.2%. But they ended up settling down back at roughly unchanged levels day over day. So ultimately, no big deal on the GDP front. Things improved on the 24th, but not for any particular reason. It was an early close and yields ended the day at 4.13%. Roughly in line with the midday lows from a week earlier. There were no other major economic releases, although we did get consumer confidence on Tuesday along with the GDP data. And while that’s not a major release, it does have a component that may have helped bonds recover on Tuesday. It’s known as the labor differential, which measures the difference in two survey questions asked by the conference board. Those are whether or not jobs are plentiful or hard to get. The difference between those is known as the labor differential and can track the unemployment rate fairly well. In this case, it moved to another cycle low, indicating a potential increase in the unemployment rate. Looking ahead, it’s not a perfect forward looking indicator, but it is something that some traders keep an eye on. Seven year treasury auction on Wednesday went off without a hitch. No big deal, slightly positive reaction. And then of course, markets were closed on the 25th for Christmas. And the 26th while fully open was rather uneventful. There were some ups, some downs, but no major changes. Overall, that brings us to the present week where there is even less by way of significant econ data. We will get the weekly a DP numbers tomorrow, but those haven’t been a big market mover recently on the ostensibly big market. Moving front, we have the Fed Minutes tomorrow afternoon. It’s a day earlier than normal, but these also have not been major market movers. In addition, we have multiple Fed speeches on record and have a pretty clear sense of where the average Fed member sees rates going based on various outcomes for the labor market and inflation. Another early close on Wednesday for New Year’s Eve, fully closed on Thursday, and then back with a full trading day on Friday the second. But there will be no jobs report that Friday, even though it’s the first Friday of the month. For that, we’ll have to wait for January 9th. That will certainly be the most important day of econ data in the near future, although there are other reports in the same week that will begin to ramp up the volume and volatility for 2026.
Matt Graham, Founder and CEO, MBS Live
Matt began as an originator in 2002. He fell in love with the idea of following MBS in real-time but felt that existing products were only scratching the surface. Thus was born MBS Live in 2007, the first-of-its-kind platform with real-time market data/analysis, and live chat with analysts, traders, and originators around the country. He is currently the Founder and CEO of MBS Live!
He’s been covering bond/mortgage markets, writing commentary, alerts, and chatting with the live community every business hour of every business day ever since.
Matt also serves as the Chief of Operations for mortgagenewsdaily.com, where he is one of the industry’s most respected mortgage rate experts, frequently quoted in the media. Mortgage News Daily’s rate index is used as the definitive resource on day-to-day mortgage rate averages.
He lives in the Pacific Northwest with his wife and son where he enjoys skiing, fishing, coaching youth sports, playing the guitar, and more DIY projects/hobbies than he’d care to admit.