MBS Day Ahead: The Unbelievable Impact of the Government Shutdown

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Posted To: MBS Commentary

Markets closed on Friday with a government shutdown still in limbo. Ostensibly, that meant the reaction in stocks and bonds wouldn't be fully seen until this morning. Indeed, there was a reaction, and for all the fuss made over the shutdown in the news (and even among some traders/analysts), the end result may be hard to believe (unless you've been paying attention to our analysis or otherwise already in the know). In other words, nothing happened in markets, and that continues to be the case as the domestic hours begin. Part of the underwhelming response could be due to the fact that the shutdown is still in a sort of limbo, given that another temporary bill is in the works for today. But even then, it continues to be the case that government shutdowns aren't huge market movers…(read more)

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