MBS RECAP: Bloodshed For Bonds as Fed Dots Paint Grim Picture

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Posted To: MBS Commentary

It's either the best thing or the worst thing in the world, depending on what kind of originator you are. On one hand , the outlook for the economy could be strong enough to drive the growth and inflation needed to support a more urgent rate hike schedule at the Fed. That would be good–especially if you don't originate for a living. On the other hand , regardless of the long term health of the economy, a more urgent rate hike outlook for the future adds up to bonds getting killed in the present. That's what today was all about. You might hear someone say rates rose today because the Fed hiked. Laugh at that person. Markets were well aware the Fed would hike. And they were fully prepared to move either direction afterward. Markets had no idea how all of the recent data and politics…(read more)

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