Posted To: MBS Commentary
There's a global pandemic. On the one hand, it seems to be improving. On the other, it's responsible for a potentially permanent shift in the US labor market. On the one hand the federal government is spending trillions on stimulus, thereby putting upward pressure on rates due to supply and economic reflation. On the other hand, the Fed is spending trillions buying that supply (in addition to keeping short-term rates at zero). No one knows exactly how this all plays out (understatement of the year), but markets know there are/were big enough and/or bad enough things in the immediate past/present/future to justify an all-time low trading range for longer-term bond yields. Questions about how long this range will persist and the exact boundaries will be answered by and by. In the meantime…(read more)
Source: Mortgage News Daily
