Posted To: MBS Commentary

Like 8 other Wednesdays each year, today brings a healthy dose of volatility risk from the Fed Announcement and press conference (note: this is one of the four that is NOT accompanied by "the dots," which tend to add even more volatility). If the bond market has any strong reaction to the Fed, it won't be due to any changes in policy. Those aren't even on the table for this meeting. Rather, investors are simply seeking to refine their understanding of the Fed's covid/econ/tapering reaction functions. If the Fed can provide such a thing, it could easily account for a break outside the recently narrow range in longer-term bonds. That narrow range is a product of competing forces to some extent, with global markets (EU/China) pulling yields lower and US equities suggesting…(read more)

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Source: Mortgage News Daily