MBS RECAP: Much Sound and Fury; Little Significance

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Posted To: MBS Commentary

Today's focal point was an anticlimactic can-kicking episode wherein the government shutdown was finally ended, but only for 3 weeks. The passage of the temporary bill was so well telegraphed that markets had plenty of time to start trading it throughout the day. Stocks and bond yields edged higher , but not in any exceptionally scary way. After all, this is just a temporary solution and not the kind that engenders much confidence about a permanent solution. That said, a permanent solution will, of course, have to come. Today's temporary solution is evidence that political will can be bent enough to accomplish such things. I don't really care which side of the aisle bends when it comes to the market reaction. A permanent shutdown solution connotes pressure on bonds . Even the temporary…(read more)

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