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Fed Meeting Minute Bullet Points: What's Yield Curve Control?

Posted To: MBS Commentary

The minutes from the most recent Fed meeting were released today. While there's not much left to be said when they've already been so clear about keeping rates low for a long time, we did get a few new thoughts about "yield curve control." That would basically entail the Fed buying whatever it takes to keep longer term rates within a certain range compared to the short-term rates it already effectively controls through the Fed Funds Rate. To be clear, the Fed doesn't control 2yr Treasury yields, but by keeping the Fed Funds Rate at zero, it greatly limits the extent to which 2yr yields can rise. Case in point, after trading in the 1-2% range in the 2nd half of 2019, 2yr yields have been under 0.30% since the end of March, and generally trading a very flat range. 10yr yields…(read more)

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