MBS RECAP: Have You Heard The One About The Bond Market Correction?


Posted To: MBS Commentary

Bonds continued to sell-off again today–this time slightly more aggressively than yesterday. Yes, the current spike in yields/rates is frustrating, but it's par for the course when it comes to bond market corrections. September is notorious for going against the summertime grain in the short-term, but not for single-handedly altering the longer-term trend. In short, this too shall pass, although we don't know exactly when or exactly how big the damage will be when that time comes. We can, however, throw out a few potential flashpoints in the near future: the ECB announcement on Thursday and the Fed next Wednesday. Even then, there is a technical limit to how much higher rates will go without actual economic fundamentals being part of the move. In other words, the market might not love…(read more)

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