Treasury Yields Continue Climb to 4.75% as Mortgage Spreads Hit 191 bps

Bond markets extended yesterday's selloff with the 10-year Treasury climbing another 2 basis points to 4.75% (FRED), marking a 8 basis point surge over two trading sessions. Mortgage rates remained locked at 6.66% for the third consecutive session (Freddie Mac PMMS), creating a further 2 basis point compression in primary spreads to 191 basis points. This represents the tightest mortgage-Treasury differential in recent trading and signals potential shifts in secondary market dynamics that QC teams should monitor closely. The 15-year fixed rate held steady at 5.98% while the yield curve steepened slightly with the 10Y-2Y spread widening to 41 basis points (FRED). Consumer sentiment remains depressed at 55.2 (U. Michigan) while initial jobless claims came in at 203,000, suggesting mixed economic crosscurrents that could influence Fed policy expectations and subsequently impact rate volatility. The persistent mortgage rate stability amid Treasury volatility indicates either strong GSE buying or potential secondary market illiquidity that risk officers should factor into pipeline hedging strategies. SOFR trading at 3.68% continues to anchor short-term funding costs, but the widening term structure suggests markets are pricing in sustained higher rates across the curve.