MBS Day Ahead: Small Things May Happen, But Big Things Are Less Likely

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Posted To: MBS Commentary

I'm sorry if the following is starting to sound like a broken record, but it's all we really have at the moment. The bond market encounters these sorts of trends from time to time. They're often seen after a substantial move either higher or lower in yield when markets are waiting for some sort of big flashpoint to play out. Several past examples include the months leading up to the Brexit vote in 2016, and the first few months of Trump taking office in 2017. Those examples are fairly specific as they pertain to external events that we knew we were waiting for (i.e. yes or no vote on Brexit, and "what sorts of policies and legislation are we going to see from the new administration?). But other examples of this sort of pause for market reflection have to do with the state of…(read more)

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