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Rate Pulse May 12

CPI lands at forecast top, bonds rally as Fed-cut bets shift to 2027

April CPI hit 3.8% at the top of forecasts; the 10Y still closed 3 bps lower at 4.38 while Goldman and BofA pushed their first-cut forecast to mid-2027.

Tuesday, May 12, 202610Y Treasury 4.38%
30Y fixed
6.54%
+4bps today
15Y fixed
5.85%
7d -6bps
5/1 ARM
6.32%
30d -5bps
Now

April CPI printed at 3.8% — at the top of the forecast range but not above it. The bond market read that as relief: the 10Y closed at 4.38%, down 3 bps from yesterday's 4.41, and held overnight despite fresh Treasury sanctions on Iran. The 30Y mortgage held the level: Bankrate daily 6.46% (one tick higher than Monday's 6.45), Freddie's Thursday print still 6.37%, Mortgage Daily survey 6.33%. The day's actual market-moving news happened Sunday — Trump rejecting the Iran counterproposal — so MND's MBS desk framed today as "over before it began." The structural change is on the Fed-cut outlook: Goldman Sachs and Bank of America both pushed their first-cut forecast to mid-2027 after last week's resilient jobs data, formalizing a "no cuts in 2026" base case. Realtor.com's research desk flagged April CPI as the start of "inflation contagion" — energy bleeding into airfares, apparel, and furnishings — which is the bear-case framing for the print even though the bond reaction said the opposite.

Next

The week ahead's catalyst calendar is thin. Warsh confirmation procedural votes are expected Wednesday with the full Senate vote later in the week; Powell's term ends Friday. Beyond Warsh, the next material data is PPI Thursday and mid-month retail sales. Technical level on the 10Y is 4.35 — a clean break opens 4.30, which would pull the 30Y toward 6.30 if it holds. The Goldman/BofA hawkish repositioning is the structural headwind: every dovish-tilt headline that crosses this week faces stronger consensus to fade than it did two weeks ago, so don't position for a sustained rally.

Range

6.46% sits 1bp below the 90-day high of 6.47% (range 5.98–6.47, avg 6.34) and 7bps above the 30-day average of 6.39. We're at the rich end of the recent range with three different daily prints saying the same thing every day since Friday (6.45–6.47). For borrowers quoted at the February floor (5.98%), today is 48 bps higher. For the 2023-vintage refi cohort, the math is unchanged from last week — about $210/mo on a $400K loan at 7.25% → 6.46%. Scotsman Guide reported the refi share of mortgage originations hit a 4-year high in Q1; confirmation that the rate environment is sticky enough that the rest of the industry is already running the refi playbook. ICE's mortgage monitor showed 90% of US markets posted home-value upticks in April, so the lock-in dynamic that keeps low-rate homeowners off the market is reinforcing itself.

Do

Two segments today. First, the 2023-vintage 7%+ refi cohort — Goldman and BofA pushing cuts to 2027 is the talking point that retires the "wait for rates to drop" objection. Second, purchase-fence borrowers from February quotes at 5.98% — the 48-bp gap is the wrong conversation now; pivot to the Fannie portfolio buildup story (Trump administration leaning on the GSE to grow its mortgage holdings to compress rates over time) which says the policy direction is to grind rates lower over months, not produce a rally. Do this today: pull every 2023-vintage closed file with rate ≥ 7.0% and send a one-line text — "Goldman and BofA just pushed their next Fed cut to mid-2027 — refi math doesn't get better by waiting; want a fresh number on your file?" Two replies become real conversations before Friday.

Paste-ready talking points

  • Today's payment on a $400K loan is essentially the same as last week — but Goldman Sachs and Bank of America both just pushed their next Fed-cut forecast to mid-2027.
  • If your current rate is over 7%, the 'wait it out' story just got 18 more months longer per Wall Street's biggest banks.
  • On a $400K loan at 7.25%, today's rate saves about $210/mo — that's $3,800 left on the table over an 18-month wait.
  • Spring rate floors held this week, and 90% of US markets posted home-value upticks in April. The wait math is getting worse on both sides.
  • Reply PAYMENT and I'll send the exact savings number for your loan amount today — five-minute turnaround.

Sample client message

2023-vintage refi candidates at 7%+
SubjectJust an update on your number, {client}

Hey {client}, quick update worth flagging. Goldman Sachs and Bank of America — the two biggest banks on Wall Street — both pushed their forecast for the next Fed rate cut to mid-2027 this week. Translation: if you've been waiting for rates to drop before refinancing, the smartest folks in the room now think that wait is at least 18 more months. Your current rate is around [X]%; today's number on a $400K loan is about $210/mo cheaper. Over 18 months of waiting, that's roughly $3,800 you'd be leaving on the table to see if rates drop further. Want me to pull a fresh quote on your file? Reply with your loan amount and I'll have it back to you today.