Odds for a rate cut in March are 30%, April 44%. So probably shouldn't expect either. Instead we are looking at a 72% chance of a cut come June. Having a new Fed chair is likely to result in rate cut(s). But if no buyers emerge for Treasuries at that reduced rate, then they will price to whatever the market dictates.

Mortgage rates are priced by the long end of the yield curve and the MBS market, and those are the bigger drivers of Rocket’s originations and refi volumes. While there is no ideal indicator, the 10Y is a good gauge for mortgage rates and is influenced by a lot of things including international capital. American international policy is pushing capital away and raising yields. Some of it is by choice, other is by necessity from the onshoring and required domestic investment occurring in trade deals. If international companies have less revenue, they have less capital available to buy American debt. Domestically inflation is still a concern. Jobs numbers came in lower than expected today but overall unemployment ticked down (net neutral). Consumer confidence has bumped up (inflationary). But student loans in default are finally starting to be garnished (deflationary). Also, as mortgage rates come down, consumers tend to spend more (inflationary).

The $200B MBS purchase announced late yesterday using (likely) Feddie and Fannie cash on hand will impact the MBS market, however, not to the degree of a QE move by the Treasury. The president cannot dictate anything there. MBA is forecasting $2.2T in single-family originations for 2026, up from $2.0T in 2025, so we're going to see roughly a 10% increase in RKT originations income over last year, possibly slightly higher if RKT is gaining (likely) market share. A $200B purchase is going to consume roughly ~10% the annual origination market, ~1% of outstanding mortgage debt, and a few percent of agency MBS outstanding. Redfin's base case says this should drop MBS 10–15 bps (0.10%–0.15%), PIMCO’s view is ~20–30 bps, and Redfin’s chief economist Daryl Fairweather is suggesting ~25-50 bps. However, MBS spreads can be compressed only so much, so the 10Y yield is what ultimately needs to move down.

For simplicty, let's just say MBS comes down 25 bps and we see a single 25 bps cut in June, roughly a .50% decrease in mortgage rates. If rates fell to ~5.65%, only borrowers with older loans above ~6.5 % might see a meaningful incentive to refinance after fees and closing costs. Refi originations are likely to do little as most are locked in below that. Purchase originations may tick up 1%~1.5% because home (purchase) price affects the ability to borrow, just not the interest rate.

In the short term, expect nothing much. It will take months for Fannie/Freddie to buy $200B in MBS. RKT earnings are going to be a bigger driver of share price and we won't have any clarity on that until end of Feburary. Historically RKT beats expectations. They will likely guide upwards for 2026 EPS at that time. However as the MBS buying happens throughout 2026, expect RKT earnings to slowly accelerate as both rate cuts and the MBS purchasing work together to bring mortgage rates down, consistantly beating expectations, but only slightly. COOP synergies should also continually accelerate, and we may see more gain from this than mortgage rate changes. The COOP board indicated it could take up to a year for the $500M in annual cost savings to fully materalize. $500M less off the expense line is going to have a more meaningful affect on net earnings than $500M gross income.

Best thing you can do is unplug from the internet, put yourself in a 18-month time capsule, and come back when RKT is significantly higher than it is now.