Bond market quiet this morning, with no print on today's calendar and nothing new from the Fed to add to last week's story. Bankrate's conventional 30-year reads 7.49%, unchanged since Saturday and 27 basis points above the 7.22% of a week ago. The 10-year is trading near 5.30% in Monday's session, about 2 bps above Friday's 5.28% close on Treasury's curve, so the opening session is leaning slightly against borrowers rather than giving back last week's climb.
The calendar is thin until Thursday. Weekly jobless claims and the next Freddie Mac PMMS land October 8; PMMS read 7.28% last week, up 25 bps on the week and 57 over 30 days on that survey. CPI falls in the October 10 to 15 window and is the print with the weight to move the sheet, the Consumer Sentiment window opens October 13, and the FOMC meets October 27 to 28 without a new dot plot.
For a different lens on the range today, look at the adjustable side, with both legs taken from one survey so the gap is real. On Mortgage News Daily's index the 30-year fixed reads 7.57% and the 5/1 ARM 6.85%, a 72 bp spread. On a $400,000 loan that is about $2,816 a month in principal and interest on the fixed against about $2,621 on the ARM, roughly $195 a month, or about $11,700 across the five years before the first adjustment. The ARM is not cheap on its own terms: 6.85% sits at the top of its 90-day range on that index, which ran from 6.23% to 6.87%. The spread is wide because both legs are high, and Bankrate's 30-year at 7.49% is likewise the high of both its 30-day window (6.83% to 7.49%, average 7.11%) and its 90-day window (6.54% to 7.49%, average 6.85%).
The segment for that lens is the purchase buyer who has told you they expect to sell or refinance within five years. For them, the fixed rate's insurance against later moves has a price you can now name, and the ARM's risk is in its caps and its payment after year five, which belong on the same page as the savings. For in-flight conventional files, nothing in today's calendar argues for floating into CPI on a sheet already at its 90-day high. Do this today: for each active purchase file whose buyer plans to move or refinance within five years, run a side-by-side of the 30-year fixed and the 5/1 ARM with the caps and the worst-case payment after year five spelled out.