MBS RECAP: Tax Plan Overwhelms Markets, but Fails to Stir Much Reaction


Posted To: MBS Commentary

Traders' eyes were far more burdened than their fingers (which push the "trade" button) today. There was a ton of info to take in regarding the GOP's tax bill, but not much trading to be done in response. While it was the biggest event of the day when first released this morning, the initial response was a quick "risk-off" move that favored bonds at the expense of stocks. The latter bounced back within 2 hours and bonds simply held sideways for the rest of the day. Incidentally, that means bonds held sideways right through the official nomination of Jerome Powell as the next Fed Chair. We knew there was a decent chance traders had already priced-in the Powell news. Not only was that indeed the case, but markets were so exhausted (trying to make sense of the tax headlines…(read more)

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