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Rate Pulse Aug 4

A hike gets named while bonds stall at the range top

It took an Iran de-escalation to lift bonds back to the top of their range and no further — and then the New York Fed said a hike is still on the table three days before the jobs report.

Tuesday, August 4, 202610Y Treasury 4.75%
30Y fixed
6.76%
-7bps today
15Y fixed
6.11%
7d +8bps
5/1 ARM
6.31%
30d +23bps
Now

NOW: The 30-year is 6.80%, two basis points above yesterday, eight above last week and twenty-three above a month ago. The move is small; the setup underneath it is not. Monday gave bonds a real bid — oil dropped on Iran de-escalation after planned strikes were cancelled and negotiation talk resurfaced, and the session opened materially stronger on it. The rally then went flat and held rather than extending, and by the close yields still matched the long-term highs set July 23rd. That is the tell. A genuine geopolitical risk-off got us back to the top of the range and bought nothing more. Then John Williams said the Fed still expects inflation to ease but is prepared to raise rates if it doesn't — a permanent voter putting a hike back in the toolkit. The 10-year is 4.75% on the latest read, seven basis points above two sessions prior, and VIX has drifted to 15.99. Fed funds is unchanged at 3.63%.

Next

NEXT: The calendar does everything from here. Jobless claims and the Freddie Mac survey both land Thursday the 6th — claims printed 197,000 on the July 25 read against 188,000 prior, so a second consecutive soft number would be the first real counterweight to Williams. The jobs report follows Friday the 7th and is the week's whole event; unemployment sits at 4.2%. CPI opens its window August 10th. The next FOMC is September 15th and 16th and it carries a dot plot, which means Friday's number does not just move the tape — it moves what nineteen officials write down six weeks later. Treasury also released its marketable borrowing estimates Monday, so supply is a live variable into next week's auctions rather than background noise.

Range

RANGE: 6.80% sits two basis points under the 90-day high of 6.82% and thirty-five above the 90-day low of 6.45%. Against the 30-day window (6.54% to 6.82%, averaging 6.66%) today is at the expensive end of everything the last month has offered. There is no version of this read that supports telling a borrower to wait for a better number this week — the range is intact, we are at the top of it, and the two catalysts that could break it in either direction both land in the next 72 hours. Anyone floating into Friday is making a directional bet, not a patient one.

Do

DO: The segment worth your attention today is government-loan eligible buyers, because the spread is doing work the headline rate isn't. FHA is 6.33% and VA is 6.35% against conventional at 6.80% — that is 45 to 47 basis points, wide enough that a borrower you have been quoting conventionally on a modest down payment may be looking at the wrong sheet entirely. On a $400,000 loan, that spread is roughly $120 a month before you get to the mortgage-insurance comparison, which is where the analysis has to finish. Run it properly for anyone with military eligibility you have not screened, and for FHA-viable buyers where the credit tier and LTV make the MIP math survivable. Do this today: pull your active purchase files under 10% down and re-price the three of them with the widest conventional-to-government gap before you send another conventional lock recommendation.

Paste-ready talking points

  • Today's payment on a $400,000 loan runs about $2,608 a month before taxes and insurance. That number is a touch higher than last week, not lower.
  • If you have military service in your background and nobody has checked your VA eligibility, that is worth ten minutes this week.
  • Rates are at the top of where they have been since May. Waiting has not been paying off — the thing actually moving right now is asking prices.
  • On a $300,000 loan today's payment is roughly $1,956 a month. On $500,000 it's about $3,260. Tell me your number and I'll run yours exactly.
  • Two economic reports land Thursday and Friday. If you are close to ready, this is the week to have your paperwork done, not started.

Sample client message

Buyers who paused this spring waiting for rates to come down
SubjectHonest update for {client}

Hey {client} — I want to give you a straight update rather than the one you were hoping for. Rates have not come down since we last talked; today is actually a little higher than where we were a week ago, and about where the last three months have topped out. Here's the part worth your time though: sellers have been cutting asking prices for nine months straight now, and that has moved the payment math more than any rate change would have. The house you were looking at in the spring may simply cost less today. If you send me the price range you were shopping, I'll run the current payment on it and show you exactly where you'd land — no pressure either way, I'd just rather you decide on real numbers than on waiting for something that isn't showing up.