MBS RECAP: Fed, SOTU Pass Without a Trace

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Posted To: MBS Commentary

Stay skeptical about easy answers in financial news! Here's a tremendous example. Much has been made of the stock market being on the edge of a massive correction based on rising interest rates. That's not necessarily a bad idea, but it is faulty logic to assume it will drive every little move. For instance, after today's woefully inconsequential Fed announcement, bond yields rose at first before settling back down to unchanged levels for the 3pm CME close. The rate spike was seized by stock commentators in order to explain late day stock weakness. Pretty simple, right? The only issue is that the afternoon decline in rates coincided with more losses in stocks. In other words, headlines about stocks giving up their gains due to bond yields rising post-Fed are completely worthless…(read more)

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