MBS RECAP: Stocks Lose, Rates Recover on Tax Bill Fears

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Posted To: MBS Commentary

Bonds began the day in weaker territory partly due to a correction from yesterday's strong run in the afternoon, and partly due to stronger economic data in Europe. Domestic economic data was stronger too, with Retail Sales coming in at 0.8 versus a median forecast of 0.3. The previous reading was also revised up to 0.5 from 0.2. In the past, bonds might have cared more about that sort of data, but at present, there are bigger fish to fry. After yesterday's scheduled detour for inflation and the Fed (2 things that were expected to move markets despite NOT being "the tax bill"), it was back to focusing on the tax bill today. Senators Lee and Rubio threatened to vote "no" on the tax bill unless certain changes were made regarding child tax credit refunds. The release…(read more)

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