MBS RECAP: Fed Proves Surprisingly Capable of Intraday Inspiration

We moved from NFP not mattering (and then causing a surprisingly big intraday stir) to the Fed undergoing quite a similar routine. Granted, in the bigger picture, neither event will be memorable or have a lasting impact on rate momentum, but they both came as close as they could. Today's reaction to the Fed was the opposite of the reaction to last week's NFP (a fact that only reinforces NFP "not mattering" since yields have now traded well below pre-NFP levels). I'd argue that today's reaction to the Fed was also a bigger surprise and based on more interesting underlying details. Specifically , Fed Chair Powell's thoughts on inflation were delivered in a slightly newer and more bond-friendly way. He unequivocally said there wouldn't be any rate hikes unless...(read more)

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