MBS RECAP: Huge Bond Market Reaction to Fed Minutes

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Posted To: MBS Commentary

Anxiety was growing yesterday about the Fed Minutes surprising Bonds weakened The Fed Minutes surprised Bonds weakened some more This could be a big deal Every now and then a Fed-related revelation comes along that forces markets to "reprice" the risk of a certain monetary policy outcome. In the current case, the outcome on everyone's mind is the Fed's next rate hike. Until yesterday, markets weren't too concerned about it, and that was a concern for the Fed–so much so that several Fed speakers have lamented the fact recently. Yesterday marked a turning point for the market's dismissiveness over Fed rate hike potential after both Williams and Lockhart–2 Fed presidents not known for fringy ideologies–essentially said a June hike was more possible than markets realized…(read more)

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