MBS Week Ahead: Fed Gives Green Light to Follow Data

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Posted To: MBS Commentary

In the week just passed, the bond market underwent a nice correction after the previous week pushed yields higher at the fastest pace in years. To put that move in context, August was the best month for the bond market in years and the big week of selling that ended on 9/13 was largely a correction to August's strength. Last week, then, was a "correction to that correction," and a sign that bond buyers are still alive, as long as they see enticing levels. In the week ahead, traders will continue to reflect on last week's message from the Fed: economic data is the biggest game in town over the next 6 weeks. Powell did his best to leave us with the sense that things could go either way, both for the economy and the Fed policy response. He also continued placing emphasis on overseas…(read more)

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