Treasury yields rise as CPI data tests mortgage rate outlook
The US economy added 165,000 jobs in October, nearly three times the 59,000 economists had projected, while the unemployment rate fell to 4.1%.
That resilience pushed the 2-year Treasury note, which tracks short-term Federal Reserve policy expectations most closely, up more than 4 basis points to 4.57%, as markets priced out near-term rate cut expectations.
A hot jobs number reduces the probability of any Fed pivot before year-end, keeping the spread between the 10-year yield and the 30-year fixed mortgage rate elevated.
That spread, often running 2 percentage points above the 10-year benchmark, has been among the widest seen in recent years, compounding the affordability pressure that has cooled origination volumes across the US market.
Mike Fratantoni of the MBA, Seema Shah of Principal Asset Management, Eric Orenstein of Fitch Ratings, and Barry Habib of MBS Highway say robust employment data is reinforcing expectations for tighter monetary policy heading into 2027. https://t.co/CSQ8hikcCX
— Mortgage Professional America Magazine (@MPAMagazineUS) November 6, 2026
Oil offered partial relief. West Texas Intermediate futures for December delivery fell more than 3% to $87 per barrel after President Donald Trump said new Iran attacks were “highly unlikely.”
