MBS RECAP: Super Sideways Today Despite Stronger GDP

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Posted To: MBS Commentary

Bonds began the day with intensely sideways momentum intact. That was the case all the way back to the 10am ET hour yesterday after yields rose in response to Draghi's press conference following the ECB announcement. The ECB was this week's big to-do, as evidenced by a relative lack of response to this morning's GDP data (granted, there were also some caveats that detracted from the headline, like the 0.2% miss in Core PCE). Our own central bank, the Federal Reserve, delivers its rate decision and policy announcement on Wednesday. The Fed is certain to cut its policy rate by 25bps–so certain, in fact, that the rate cut itself will not put any downward momentum on yields. It's already had that effect in advance over the previous weeks and months as it's been priced-in to…(read more)

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