Mortgage applications decreased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 25, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 3 percent higher than the same week one year ago.
The Refinance Index decreased 4 percent from the previous week and was 42 percent higher than the same week one year ago.
The Agency MBS market shrank in April.
And MBS daily returns have the highest return volatility.
Washington DC is loaded with good ol’ boys. Willing to cut deals with anyone for a slice of financial pie. Like “10% For The Big Guy” Joe Biden.
Money flowing into Treasury funds hit its highest since 2017, by far.
And with the massive expansion of The Fed’s balance sheet with a) the financial crisis and b) Covid crisis, The Fed still has a staggering amount of bonds on its balance sheet, making it vulnerable to interest rate increases.
Like what has happened in 2023 and 2024 under Biden. A fine mess!
Sail away. We are all prisoners of the theft by DC politicians.
Adjustable-rate mortgages (ARMs) have climbed to the highest origination volume share since 2008 as the yield curve steepens and bank lending demand picks up. The majority of ARM lending goes to high credit borrowers with jumbo-sized loans, which many banks see as a good fit to keep in their portfolios as they are seen to have relatively limited credit and interest-rate risk.
Its Monday! Typically we see Blue Mondays. But not with the tariff war between China and the US. We are watching a chess match between Trump and China. Dow futures are up 461 points at 9am EST.
Obama/Biden/Harris/Schumer/Pelosi have let the US be the punks for China. Trump is simply trying to level the playing field and China’s Xie doesn’t like the new equilibrium.
VIX Index fell by 18.7 points yesterday … largest one-day decline in history.
The correlation between stock prices and bond yields has returned to positive territory — hinting at a period of distress in equities and a regime shift in equity and bond markets where recession fears, rather than inflation, may be starting to drive direction of both. The correlation between the two asset classes was positive for the better part of 20 years prior to the pandemic, suggesting equities trended in the direction of yields as inflation mostly coincided with growth. Stocks held a negative correlation to yields throughout most of the 1980s and 1990s, when inflation hurt stocks — and that phenomenon returned for the 2022-24 bear market and recovery period.
Notably, major stock corrections occurred each time the correlation jumped out of its primary regime.
Thunderstruck! The tariff kerfuffle between the Trump Administration and China is causing turbulence in the Treasury market. The 10-year Treasury rate is soaring with China’s counterpunching.
MBS spreads are widening.
Along with volatility.
But corporate spreads are widening more than MBS spreads.
The 10Y-2Y yield curve has risen to the highest level since the early days of “China Joe” Biden.
On a related note, Freddie Mac serious delinquency rates on mortgages is now the highest since the financial crisis.
Headline PPI fell (yes fell) 0.4% MoM (dramatically cooler than the 0.2% MoM rise expected), dragging the headline index down to +2.7% YoY.
The market is re-assessing the structural attractiveness of the dollar as the world’s global reserve currency and is undergoing a process of rapid de-dollarization.
Having dipped lower in the previous month (following a few straight months of re-acceleration), expectations were for both headline and core measures to continue trending lower on a YoY basis… and they were.
Headline CPI FELL 0.1% MoM (vs +0.1% exp), which dragged the YoY CPI to +2.4%, matching the September lows…
Source: Bloomberg
That is the weakest MoM print since May 2020.
Core CPI also printed cooler than expected (+0.1% MoM vs +0.3% MoM exp), pulling the YoY print down t0 +2.8% YoY – the lowest since March 2021…
Source: Bloomberg
Services inflation tumbled…
Source: Bloomberg
CPI breakdown:
Headline:
CPI decreased 0.1% after rising 0.2% in February, and below the +0.1% estimate. Over the last 12 months, CPI rose 2.4%, below the 2.5% estimate.
Energy CPI fell 2.4% in March, as a 6.3% decline in the index for gasoline more than offset increases in the indexes for electricity and natural gas.
Food CPI rose 0.4% in March as the food at home index increased 0.5% and the food away from home index rose 0.4 percent over the month.
Core CPI:
The index for all items less food and energy rose 0.1% in March, following a 0.2% increase in February.
Indexes that increased over the month include personal care, medical care, education, apparel, and new vehicles.
The indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March.
Core CPI details (MoM increase):
The shelter index increased 0.2% over the month.
The index for owners’ equivalent rent rose 0.% in March and the index for rent increased 0.3%.
The lodging away from home index fell 3.5 percent in March.
The personal care index rose 1.0%in March.
The index for education rose 0.4% over the month, as did the index for apparel.
The new vehicles index also increased over the month, rising 0.1%.
The index for airline fares fell 5.3% in March, after declining 4.0% in February.
The indexes for motor vehicle insurance, used cars and trucks, and recreation also fell over the month.
The household furnishings and operations index was unchanged in March.
The medical care index increased 0.2% over the month.
The index for hospital services increased 1.1% in March and the index for physicians’ services rose 0.3% over the month. In contrast, the prescription drugs index fell 2.0% in March.
Core CPI details (YoY increase):
The index for all items less food and energy rose 2.8 percent over the past 12 months.
The shelter index increased 4.0 percent over the last year, the smallest 12-month increase since November 2021.
Other indexes with notable increases over the last year include motor vehicle insurance (+7.5 percent), medical care (+2.6 percent), recreation (+1.9 percent), and education (+3.9 percent).
While goods inflation is flat (zero-ish), services cost inflation is fading fast…
Source: Bloomberg
Shelter and Rent inflation is slowing fast:
Shelter inflation +0.3% MoM, +3.99% YoY, down from 4.25% in February (lowest since Nov 2021)
Rent inflation +0.3% MoM, +3.99% YoY, down from 4.09% in February (lowest since Jan 2022)
The so-called SuperCore CPI – Services Ex-Shelter – dropped 0.1% MoM dragging it down to +3.22% YoY – the lowest since Dec 2021…
Source: Bloomberg
Source: Bloomberg
Drill Baby Drill (and tariffs recession fears) have dragged energy prices lower and pulled CPI lower with it…
The Federal Reserve has created massive asset bubbles in financial markets. And the “tariff war” between the US and China. Since April 8, 2020, the S&P 500 index is up 81% while The Federal Reserve has printed a staggering amount of money as M2 Money is up 27.4% over the same period.
So, it is not surprising (except to Barstool Sports’ Dave Portnoy) that the stock market has declined with China’s childish petulance over Trump’s tariffs. While Trump levied a 104% tariff on Chinese goods, China counterattacked with a 84% tariff on US goods.
Confounded Interest - Anthony B. Sanders 
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