MBS RECAP: Stocks and Bonds Both Cheer Yellen’s Dovish Confirmation

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Posted To: MBS Commentary

Translating Yellen's speech today: not only is the Fed "data dependent," but it doesn't take much to deter hikes and even to contemplate ways to ease if rates fall back to zero Stocks and bonds both liked it a lot. The end Last year, one of the top sound bytes out of the Fed was that it would remain "data dependent" in assessing how and when to raise rates. Indeed, various iterations of the same concept have pervaded almost any FOMC communication for quite some time. But in the earlier days of the Fed's use of that phrase, markets didn't take them at their word. I know I didn't–at least not to the extent they seemed to be advocating. At issue was the fact that other parts of the overall monetary policy thesis seemed downright biased toward raising rates…(read more)

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