MBS RECAP: Fed Delivers on Expected Volatility

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Posted To: MBS Commentary

The Fed Announcement and press conference may not have left bonds in hugely different territory today, but the 2pm-3pm hour was one of the wildest 60 minute rides of the year. It all begin with the very-much-expected 25bp rate cut from the Fed and a slightly less anticipated policy announcement that left very little changed from the previous version. Markets initially read that as unfriendly for bonds before taking heart from the early termination of the Fed's balance sheet run-off. Powell brought the pain, and the pleasure, and the pain, and then the pleasure again, in that order, and by increasing degrees. Simply put, reporters and markets wanted to pin him down on any sort of leaning with respect to rate cut plans in the future. In the same breath, he gave two completely different answers…(read more)

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