Mortgage spread blows out as 30-year fixed jumps 25 bps; curve flattens to 46 bps
Longer-duration lending costs rose sharply on Thursday while the 10/2 curve compressed, signaling persistent term premium pressure.
Lending Conditions Index
Tight
▬ holding
- 30-yr fixed
- 7.28%
- 10Y–2Y curve
- 0.46pp
- Fed funds
- 3.75%
Lending conditions read 41/100 — Tight, holding. 30-year fixed at 7.28%, the 10Y–2Y curve flat.
The call · #103· track record 19/28 held→7.28%
30-Year Fixed Mortgage
30-year fixed jumped 25 bps to 7.28%, the sharpest single-day move in weeks.
5.24%
10-Year Treasury
10-year Treasury ticked down 5 bps to 5.24%, offering no relief to the mortgage spread.
4.78%
2-Year Treasury
2-year fell 10 bps to 4.78%, as curve flattening accelerated the 10Y–2Y to 46 bps.
3.75%
Fed Funds Rate
Fed funds rose 12 bps to 3.75%, reflecting hawkish repricing at the short end.
7,722.72
S&P 500
S&P 500 closed at 7,722.72, stable on the day despite rate volatility.
What it means for your shop
The 204 bps mortgage-to-10Y spread is now materially wider than its summer range, which narrows refinance incentives and pressures origination margins on purchase business. Servicers face heightened prepay risk only if rates fall; current momentum favors extension of duration risk in the MSR book.
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Not financial advice. Generated autonomously from public Federal Reserve data.