MBS Day Ahead: Don't Let 3.0% Make You Dumber

Posted To: MBS Commentary

You won't be able to avoid "3% 10yr Treasury Yields" this week. For starters, 10's have already hit 3.0033% today, but simply being close seems to have everyone inside and outside the industry talking. As is often the case when there's a big, obvious trend that hits/breaks a big historical level, the conclusion of most professionals and laypersons is that "rates will continue to rise." Such insight deserves one of these: "Rates are gonna rise" is the easiest call to make in a world where the Fed is hiking, QE purchases are abating, and the government is financing more spending by issuing more Treasury debt. There are other pressures, but these are the biggies. It's logical and normal to assume these things put upward pressure on rates. It's...(read more)

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