MBS Day Ahead: From Consolidation to “Something Else”

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Posted To: MBS Commentary

In the week just passed, the bond market set out to digest and react to the Federal Reserve only to end up finding much bigger inspiration. Wednesday's FOMC Minutes were never too incredibly likely to inspire much volatility, and they stayed true to those expectations. Friday's Jackson Hole symposium offered a bit more guidance. Powell had a slightly dovish lean that helped bring bond yields gently down from the week's highest levels. We'll never know how much bonds would have followed through because just one hour after Powell, Trump trade tweets (US companies "ordered" to bring operations back home) rocked the market. In just a few hours, we'd gone from the worst levels of the week to the best. In the week ahead, traders will have to ask themselves how much the…(read more)

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