MBS Day Ahead: Anything Other Than a Crushing Defeat is a Big Victory

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Posted To: MBS Commentary

In case you missed yesterday, it was a doozy. Here are a few links that would help you get caught up: Here's Why Bonds Loved The Fed (And It's NOT The DOTS) Fed Officially Announces Big Bond-Buying Change yesterday's Fed Announcement bullets (MBS Live members) Fed Bond-Buying Shocker: What Happened and Why Markets Are Reacting (MBS Live members) Long-story short, the Fed announced an end of the balance sheet runoff process by October 1, 2019, and a decrease of $15bln/month in the runoff amount starting in May 2019. Any decrease in the runoff amount is equivalent to an increase in Fed bond-buying. To be clear, that's an extra $15bln a month in May, another $15bln a month in October, PLUS another $15bln or so from MBS proceeds (which weren't part of the plan over the next…(read more)

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