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MBS Day Ahead: Bonds Look to Challenge Trend With Powell on Deck

Posted To: MBS Commentary

The next Fed announcement is 1.5 weeks away and so it's time to start ramping up expectations for the details of the Fed's official QE announcement. But wait… Aren't they buying a ton of bonds already? Indeed, the Fed continues purchasing both MBS and Treasuries in relatively significant quantities every day, but they do so under "emergency measures." Markets expect the Fed to make it official in this upcoming meeting. Why is that? The Fed is committed to transparency. For anyone who tuned in very much to the pre-Bernanke Fed communications, this is a bonafide fact . They're also committed to ensuring smooth market functioning as the economy battles back from coronavirus impacts. Under the current emergency policy, markets are left to guess how and when the daily…(read more)

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