Markets Expected More Dovishness From Powell AM data was a mixed...
Markets Expected More Dovishness From Powell AM data was a mixed bag that left bonds slightly weaker on the day, but not in an alarming way. GDP was mixed, coming in much stronger at the headline, but with lower domestic demand numbers. PCE prices were revised 0.2 higher for the quarter, meaning that tomorrow's monthly PCE data has a 1 in 3 chance of being the culprit (slightly raises risk of higher inflation reading). But the day's big focus was on Fed Chair Powell's press conference. The announcement itself was inconsequential. Powell had a chance to get a bit more dovish in response to recent inflation data, but instead stuck to the exact same script (hoping tariff inflation is a one-off, but wants to wait and see, and has luxury of doing so based on 4.1% unemployment). Bottom line: no bone thrown to rate cut optimists = Fed Funds Futures priced in lower odds for near-term cuts. This spilled into bonds only modestly, leaving 10yr yields in line with AM highs and leaving the broader trend as sideways as ever. Econ Data / EventsADP Employment 104k vs 75k f'cast, -23k prev Market Movement Recap09:29 AM A hair weaker overnight with additional selling after data. MBS down 5 ticks (.16) and 10yr up 5bps at 4.373 12:53 PM A bit of resilience heading into Fed announcement. MBS down 2 ticks (.06) and 10yr up 4.3bps at 4.365 02:08 PM very small, friendly reaction to Fed. MBS down 1 tick (.03) and 10yr up 2.6bps at 4.348 03:22 PM Weaker after Powell press conference. MBS down 5 ticks (.16) and 10yr up 5.3bps at 4.374
Markets Expected More Dovishness From Powell AM data was a mixed bag that left bonds slightly weaker on the day, but not in an alarming way. GDP was mixed, coming in much stronger at the headline, but with lo... (read more)
Wednesday brought another incremental increase in the level and importance of the calendar events with the power to create volatility for rates. Some of the events were economic reports out earlier in the morning. The other 2 events consisted of the ... (read more)
Is it just a matter of time until insurance companies tell us where to live, what to make out houses out of, and what, exactly, we’re allowed to plant in our yards? We may be entering that world. Lenders and vendors live via rules and regulations. I ... (read more)
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