MBS RECAP: Limited Reaction to Powell Testimony; Stocks

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Posted To: MBS Commentary

Fed Chair Powell fielded questions from the Senate Banking Committee today as a part of the 2-day semi-annual congressional testimony often referred to as the Humphrey Hawkins address. These testimonies have plenty of street cred based on past examples where they've caused big market movements. The difference between then and now is that markets don't have much to learn from the Fed. In other words, there's not much room for off-the-radar surprises. Today's market reaction bore that out. A few bond bulls were positioned for Powell to say something dovish. When he didn't, there was a quick, shallow, negative reaction, followed by a sideways grind that kept longer-term bond near unchanged levels. Shorter-term bonds continued to lose ground, because that's what shorter…(read more)

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