MBS Day Ahead: Are Markets Confused Again?

Posted To: MBS Commentary

What's up with this? Wasn't the Fed meeting last week supposed to bring some clarity to the long-suffering sideways trend that had been mostly intact since early August? Depending on when we've checked back in with that trend, it's given hints that it might be going in one direction or the other. At first, it looked like it wasn't even going to wait for the Fed as yields burst higher on the Tuesday leading up to the announcement. Following the announcement, yields had their best 2 days in more than a month, hinting that the breakout might come in the other direction. But now, the sideways trend increasingly looks--well... sideways . Despite a solid attack on the lower boundary yesterday, yields were turned away from 2.10 yet again. At this point the only breaks have occurred...(read more)

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