MBS RECAP: Uneventful Fed Stands Aside For Weaker Bonds

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Posted To: MBS Commentary

It's beginning to look and sound a lot like the Springtime when bond analysts were making their calls for the year's highest 10yr yields. Guesses ranged from 3-4% with the majority somewhere in the lower half of that range. The trigger back then was a move up toward–and eventually through–the 3% level. It's been the same story over the past few trading sessions with today finally seeing a break above 3%. Japanese bond market weakness drove the initial move higher in the overnight session, but to be very clear, Treasuries continue to have their own reasons to sell. That was made apparent at 8:30am, when the refunding announcement (Treasury's statement about upcoming borrowing plans) specified a neutral outlook for the weighted average maturity. In other words, whereas Treasury…(read more)

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