The Rate Update
Week in Review & A Look Ahead
with Dan Frio
Friday, October 17, 2025
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🧭 Headline
The day’s defining move was a rapid repricing in Fed Funds Futures and the short end of the curve, pulling longer yields lower. No single headline fits the timing; regional‑bank stress and prior Waller remarks were hours off. Either way, MBS firmed and many lenders issued afternoon price improvements.
📝 Caption of the Day
Today’s standout move was a swift, outsized drop in Fed funds futures and other short‑tenor rates. Longer maturities followed, but the short end clearly set the pace. There wasn’t a clean, single headline behind it. Some pointed to renewed regional‑bank worries, yet the timestamps don’t match the rate swing. Others flagged earlier remarks from Fed’s Waller—made more than two hours before the rally. Regional banks indeed had a rough session, but their peak volume and volatility arrived roughly two hours before the surge in futures. Bottom line: the true spark is murky, but the outcome—friendlier rates—benefits borrowers.
⏱️ Market Movement Recap
- 10:51 AM ET — Slightly weaker overnight: MBS −0.125; 10‑yr +4.1 bps to 4.011%.
- ~12:15–12:25 PM ET — “Something” hits stocks/bonds: short end leads, year‑end Fed expectations 3.60 → 3.56 (largest quick move in a month).
- Afternoon — 10‑yr −4 bps to 3.987%; MBS +0.09; multiple lenders issue afternoon rate improvements.
Treasury Yields
10‑yr 3.987%
2‑yr ≈ 3.55% • Curve led by short end
UMBS 30‑yr 5.0
99‑75
Intraday change +0.09 • “Best levels” mid‑day
🏠 Today’s Mortgage Rates
Conventional
30‑yr 6.23%
15‑yr 5.80% • Averages as of 10/16/2025
Government
FHA ~6.0%
VA ~6.1% • National ranges vary by profile
🎬 Featured Video
The Rate Update with Dan Frio — Today’s Video
We break down the mid‑day rally and what it means for your mortgage rate.
▶️ Watch on YouTube
🗓️ Economic Calendar
| Day/Time | Event | Period | Actual | Forecast | Prior |
|---|
| Fri 10/17 — 12:00 AM | Roll Date — Ginnie Mae 30YR | — | — | — | — |
| Fri 10/17 — 9:15 AM | Industrial Production (%) | Sep | — | 0.1% | 0.1% |
| Fri 10/17 — 12:15 PM | Fed Musalem Speech | — | — | — | — |
| — |
| Mon 10/20 — 10:00 AM | CB Leading Index MoM (%) | Sep | — | — | −0.5% |
🏡 Recent Housing News
- Mortgage Apps Dip — Demand still running strong after September surge.
- Refi Demand Ebbs — Gradual cooldown as rates remain range‑bound.
- Pending Home Sales +4% — Headline gain isn’t exactly what it seems.
📰 Read My Latest Newsletter
10/10/2025 • 5:09 PMLowest Rates Since Fed Day After New Tariff Escalation
Rates held in a tight 0.05% band for weeks, but Friday finally broke the monotony with a clean downside break. We detail how bond positioning and headlines aligned to unlock the move.
Read the post
📋 Mortgage Rate Playbook
| Scenario | 10‑yr UST | UMBS 30‑yr | Bias |
|---|
| Base (short shutdown) | 3.95–4.10% | Firmer | Float carefully |
| Extended shutdown (> 2 wks) | 4.10–4.30% | Weaker | Lock on rallies |
| Dovish Fed / soft PCE | < 3.95% | Stronger | Float short‑term |
