MBS Day Ahead: Just What The Heck is Going on With Mortgages vs Treasuries?

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Posted To: MBS Commentary

Bonds started the new year off on a strong note yesterday, rallying to the best levels since ____. That blank would be filled in with a distinctly different month depending on who you choose as your bond market spokesman. If you choose "10yr Treasuries," we had the lowest rates since January. As we move down the line to shorter maturities, the date would get more recent. For example, we'd only have to go back to early June to see lower 2yr yields. If we choose MBS and/or mortgage rates as our representative for "bonds," the blank is filled somewhere in between–roughly April for mortgage rates and late May for 2018. Unlike 10yr Treasury yields, neither mortgage rates nor MBS are anywhere close to the levels seen back in January. WHAT GIVES?! Several things, really…..(read more)

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