MBS RECAP: Fed Minutes or Same Old Trend. Either Way, Bonds Didn’t Like It


Posted To: MBS Commentary

The Fed released the minutes from its late January meeting today. Markets thought about them for 20 minutes and then tanked. What's up with that?! Looking at rate volatility as a factor of Fed policy can be tricky business. On the one hand, it would be easy to argue that the Fed has more power than anything else to affect the trajectory of interest rates. On the other hand, it could easily be argued that the Fed is merely responding to prevailing economic and financial conditions to the best of its ability and that appearance of the Fed's outsized impact on rates has more to do with a mismatch between the market's expectations and the Fed's thinking. With all of the above in mind, the meeting minutes provide market participants with a much clearer look inside the Fed's collective…(read more)

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