MBS RECAP: Bonds Fizzle as Week Ends Without Healthcare Vote


Posted To: MBS Commentary

More than a few bond bulls out there (those are folks who want rates to go lower!) were eager for the vote to take place on the healthcare bill that drew most of the market's attention this week. They figured one of two things would happen. Most likely, there weren't enough votes for the bill to pass. It would fail, and that would be great for bonds. Alternatively, they hoped that if the bill did pass, that it would have been changed so much that it still cast doubt on the new administration's ability to push its policy agenda. You'd be hard-pressed to find a trader who wouldn't have agreed that one of those 2 outcomes was more likely than a clean passage of the bill. Instead of any of those options, markets were dealt a wild card in the form of a postponement of the vote…(read more)

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