Posted To: MBS Commentary

Last week's bond trading served the role of establishing a ceiling for yields after their biggest spike in nearly a year (and the case could be made that the rate spike in March was an artificial and temporary byproduct of covid-related market dislocations–never destined to last). In that sense, the post-senate-election rate spike is the biggest threat the low rate environment has faced. It's hard to make a case for rates to continue higher at the same pace in the short term, but perhaps even harder to make a case for rally of equal proportions. That leaves us to wonder where the next move will take us, when it will happen, and which of the handful of potential motivations will move to the forefront. We know the pandemic and the corresponding impact on the economy will be two of the…(read more)

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Source: Mortgage News Daily