Posted To: MBS Commentary

The combination of a friendly press conference with Fed Chair Powell and an unfriendly absence of change to the bond buying policy left the bond market with fairly neutral momentum intact heading into the end of the year. The only obvious hurdle to clear is that of fiscal stimulus (or a combo stimulus/spending bill) which could become a reality any time in the next few days. Bonds still probably have some moves to make depending on the outcome (sooner/bigger = higher yields). There's also apparently some motivation to be found in the econ data with today's early trading providing a fresh example. Bonds had been trending toward slightly weaker levels since the 8:20am CME open and abruptly reversed course at 8:30am. That's a perfectly rational move given the extent of Jobless Claims…(read more)

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Source: Mortgage News Daily