MBS Week Ahead: Bond Markets Aren’t in 2014 Anymore, Let Alone Kansas


Posted To: MBS Commentary

Sorry Kansans. Another false alarm where your home state was in the headline but only as a Wizard of Oz reference. For bond markets, it's an apt allusion. 2014 was home sweet home for analysts trying to understand and predict the course of 2017. I even highlighted this a few months ago in this piece . My conclusion at the time was that the similarities to 2014 were all well and good, but that they were just a visual representation of the laws of market physics following a colossal sell-off and that it would take some fundamental motivation for the rally to continue. As it happens, we don't have anything remotely similar to 2014's fundamental motivation–the inception of ECB's full-fledged bond-buying efforts. In fact, there has arguably been the opposite sort of motivation given…(read more)

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