MBS RECAP: Despite Interesting Tidbits From Fed, Bonds Barely Budge

One of the most interesting parts of today's Fed Minutes release was their characterization of the market's surprise at December announcement. At best, the Fed was seen as being a shade too optimistic about the economy and the ability to remain in a "steady as she goes" stance with monetary policy. At worst, the Fed was being oblivious to burgeoning risks. While there were real risks to consider, the most obvious risk was the fact that stocks were in full panic mode. Granted, it's not the Fed's job to placate the stock market, but they sometimes get wrapped up in such things anyway. This time around, they basically admitted as much, saying they heard that folks were surprised at their December announcement, but that those folks were now pacified by recent speeches...(read more)

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