MBS RECAP: Bonds Undo Yesterday’s Damage But Bigger Days Are Coming

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Posted To: MBS Commentary

If nothing else, today made it clear that markets care about the next Fed chair… a lot! Despite the presence of GDP data, Consumer Sentiment, and other various market moving considerations, it was a few lines of speculative news about Jerome Powell's potential Fed Chair nomination that set the tone. It wasn't a close call either. The Powell headlines were an otherworldly source of volume and momentum relative to anything else on today's radar. Fortunately, bonds like Powell better than the other ostensible frontrunner Taylor. Stocks like Powell too, for that matter, as Powell is generally seen as more accommodative–more Yellen-like. 10yr yields rode the wave of momentum all the way down to the 2.42% technical barrier, but again, were unable to break through. While it's true…(read more)

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