Posted To: MBS Commentary

Between vaccines, Brexit, covid surges, covid lockdowns, holiday retail, and various political headlines, it seems like the market should have a diverse range of considerations in the 2nd half of the month. But the fact is that Wednesday's Fed announcement is the only big market mover remaining in 2020 for the average bond trader. The Fed is not going to change rates or the amount of bonds it buys, but there's at least some chance it will tweak the proportion of long-term vs short-term bonds. Whether it does or doesn't, bonds are planning to react. Reactions to Fed announcements are never guaranteed, but the more evenly split the consensus, the higher the likelihood of a move. While it seems the consensus is tilted slightly in favor of the Fed sitting on their hands, the past 2…(read more)

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Source: Mortgage News Daily