MBS Day Ahead: A Story of Supply, Momentum, and Conviction


Posted To: MBS Commentary

Let me take you back–but not necessarily "way back"–to March 2017. Geopolitical risks weren't on the radar yet (no Syria air strike, North Korea threats, or comments on Russian relations being at an all-time low). Neither were the fiscal policy missteps that would soon shake investor confidence in the government's ability to enact the new legislation upon which many hopes were pinned. Stocks had just pushed to new all-time highs , and bonds had just bounced at 2.30 for the 3rd time this year. Here's how a chart looked at the time: Stocks muddled sideways for a few weeks as bonds freaked out about the mid-March Fed Announcement, but then things changed. The Fed hiked, as expected, but their forecasts didn't increase as much as expected. Bonds had braced for too much…(read more)

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