MBS Week Ahead: New Trend, New Hope, and a New Warning

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Posted To: MBS Commentary

For some reason, I feel like the 2nd half of 2019 has been one of the most legitimately uncertain eras of bond trading in the post-crisis market environment. That would make sense given the unprecedented combination of all-time high stocks, long-term lows in bond yields, the leveling off of the first round of Fed rate hikes in years, all against the backdrop of global trade-related uncertainty. Wait a minute… that's not unprecedented at all. It sounds an awful lot like the mid 90's. Stocks at all time highs? Check. Bond yields just bouncing after a big long rally that nearly saw yields hit the previous generational lows? Check. Fed Funds Rate cut 3 times after a being hiked more than 2.0% in the previous cycle? Check. New trade policies creating uncertainty? Check. To be fair, the…(read more)

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