Finding the Next Basis Point: Rates, Capital Markets & Mortgage Strategy

In this episode of Optimal Insights, the team discusses the factors driving mortgage rates higher as the 10-year Treasury approaches 5% and mortgage rates near 7%. The conversation covers inflation data, global energy market disruptions, Federal Reserve expectations, government debt issuance and the broader economic forces influencing interest rates.The team also examines recent developments in artificial intelligence, including regulation, competition among AI providers and potential implications for financial markets and economic growth.In the second half of the episode, the team recaps the recent Optimal Insights Capital Markets Forum in Nashville, sharing key takeaways on non-QM lending, housing affordability, borrower trends, mortgage servicing rights (MSRs), excess servicing strip (ESS) opportunities and operational efficiency in today’s lending environment. The episode concludes with a preview of Optimal Blue Summit 2027.Key Topics10-year Treasury yields reaching 5%Mortgage rates approaching 7%CPI and PPI inflation dataGlobal energy market disruptions and oil pricesFederal Reserve rate hike expectationsAI investment, competition and regulationCapital Markets Forum highlightsNon-QM lending growth and lender strategiesHousing affordability and generational homeownership trendsMortgage servicing rights (MSRs) and ESS structuresPreview of Optimal Blue Summit 2027Chapters00:00 — Market update: Treasury yields and mortgage rates09:40 — Inflation, Federal Reserve expectations and AI developments19:19 — Capital Markets Forum recap and Optimal Blue Summit 2027 previewOptimal Insights TeamVimi Vasudeva – Managing Director, Hedging & Trading OperationsJim Glennon – Senior Vice President, Hedging & Trading OperationsAlex Hebner – Hedge Account ManagerJames Cahill – MSF/MSR Account ManagerProduction TeamSara Holtz – Executive ProducerMatt Gilhooly and Alex Kreuter – ProducersCommentary included in this podcast is for informational purposes only and should not be construed as legal, trading, hedging or financial advice from Optimal Blue.Mentioned in this episode:Get Ahead of What’s Next at Optimal Blue Summit 2027The mortgage market keeps moving. Optimal Blue Summit 2027 brings together industry leaders, innovators, economists, and technology experts for three days of market intelligence, hands-on learning, and meaningful connections. Join us February 1–3 in Scottsdale, Arizona, to hear from Troy Aikman, Bob Broeksmit, Michael Fratantoni, Joe Tyrrell, and other influential voices shaping the future of mortgage. Optional training sessions and a championship golf experience are also available. Early-bird registration is just $199 through October 31. Register today at Summit.OptimalBlue.com.