MBS Day Ahead: Are Markets Really Ready To Rethink a Rate Hike?

Posted To: MBS Commentary

I saw a lot of this type of stuff yesterday, both in the news and in less public circles: something to the effect of the recently weak data giving the Fed pause when it comes to the relative certainty of a December rate hike. I must say I'm really not sure what has changed in 2 days. Monday saw a much weaker Chicago PMI, but no bond market reaction . To be sure, bonds rallied a bit, but they'd already done so by the time Chicago PMI came out. Yesterday's rally was more serious business apart from the fact that multi-week low yields were already broken by the time the now-notorious ISM Manufacturing data came out. Are we to believe that market participants have gone from "not caring" about manufacturing data to "caring" in one day? After all, we've been giving...(read more)

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