Last week brought a mix of global headlines and market movement, with interest rates ticking slightly higher and testing key levels. For mortgage brokers, the takeaway isn’t the noise — it’s how these moves affect borrower expectations, rate conversations, and timing decisions as we approach next week’s Fed meeting.

“There ain’t no easy way out… I won’t back down.”
— Tom Petty

Here’s what mattered — and how to frame it with clients.

 

Global Headlines Created Noise — But Didn’t Break the Market

Early last week, markets reacted to global uncertainty ahead of the World Economic Forum in Davos. Initial fears around policy coordination, growth, and geopolitics caused a brief selloff.

As the week progressed, those worst-case scenarios failed to materialize. A preliminary framework agreement involving Greenland eased concerns, and markets rebounded quickly.

Broker takeaway:

Despite scary headlines, risk appetite held up. This kind of resilience matters because it keeps rates from reacting sharply to short-term news — something brokers can point to when calming nervous borrowers.

 

🇯🇵 Why Japan Matters to U.S. Mortgage Rates

The more meaningful pressure on rates came from Japan.

Japan’s 10-year government bond yield surged to its highest level since 1998, and that move rippled through global bond markets. When yields rise overseas, global investors compare returns — which can temporarily pull money away from U.S. Treasuries and push U.S. yields higher.

What brokers should know:

• This wasn’t about U.S. inflation or housing fundamentals
• It was a global bond market reaction, not a domestic breakdown
• These moves can create short-term rate pressure without changing the longer-term housing outlook

This context is helpful when borrowers ask, “Why did rates move when nothing changed here?”

 

🇺🇸 U.S. Growth Remains a Tailwind

Back home, U.S. economic data continues to show strength.

The final Q3 GDP reading came in at 4.4%, driven primarily by private-sector activity — not temporary government stimulus. Even more notably, early Q4 estimates point to growth north of 5%.

Why this matters for brokers:

• Strong employment and spending support housing demand
• Growth driven by the private sector tends to be more sustainable
• A resilient economy reduces the risk of sudden market disruptions

This combination supports steadier housing activity, even if rates move within a range.

 

The Key Level Brokers Should Watch: 4.20% on the 10-Year

One technical level continues to matter for mortgage pricing: 4.20% on the 10-year Treasury.

• Last year, this level capped improvements in mortgage pricing
• When the 10-year moved below it in late 2025, pricing behavior improved
• Recent moves back above 4.20% have reintroduced mild pressure

Broker takeaway:

For mortgage pricing to improve meaningfully, markets will want to see the 10-year sustainably below 4.20% again. Until then, expect some back-and-forth — not a breakdown.

 

Where Rates Stand Today

30-Year Fixed (Freddie Mac, Jan 22):

• ~6.09%
• Slightly higher than last week
• Significantly better than a year ago

10-Year Treasury:

• 4.25%
• Up from last week
• Still well below early 2025 levels

Broker takeaway:

Rates are elevated from recent lows, but still operating in a manageable, range-bound environment — one that allows deals to move with the right structure and expectations.

 

Fed Meeting: What Brokers Should Prepare For

The Fed meeting this week is the main event — but brokers should remember it’s not a single moment.

Three phases to watch:

1. Fed statement — subtle wording changes can move rates quickly
2. Chair Powell’s press conference — volatility often shows up here
3. The day after — often the most meaningful move, once markets digest the message

Why this matters for brokers:

Borrowers often react to headlines immediately. The real opportunity is helping them understand that market direction often becomes clearer after the initial reaction, not during it.

 

What Brokers Should Do Right Now

In this environment, proactive brokers have an edge:

• 🔄 Reconnect with borrowers who paused after recent volatility
• 🧮 Re-run scenarios that were tight at the margin
• 🏘️ Lean on flexible programs (DSCR, Bank Statement, Non-QM) when conventional timing doesn’t align
• 📣 Set expectations around Fed-week volatility — and the likelihood of follow-through afterward

 

Bottom Line for Mortgage Brokers

Yes, rates moved up slightly last week — but the bigger picture remains constructive.

Global noise hasn’t broken the market, U.S. growth is supporting housing demand, and inflation trends remain manageable. As we head into the Fed meeting, the opportunity for brokers is education, preparation, and timing — not waiting on headlines.

Markets may be testing key levels, but momentum in housing and lending hasn’t disappeared. Brokers who stay engaged and guide clients through the noise will be best positioned when the next clear move arrives.