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MBS Day Ahead: Markets Debating Next Move After Fed; Update on Mortgage Spreads

Posted To: MBS Commentary

Yesterday's Fed announcement managed to deliver the bare minimum of the market's expectations and underdeliver on fairly reasonable hopes. That resulted in a logical protest from both stocks and bonds. Each had walked their own cautious path leading up to the Fed. Bonds were definitely sideways. Stocks were gradually improving, but may well have been sideways had they not been bouncing back from the big weakness in August. As of this morning, stocks are losing more ground and bond yields have been more willing to follow. Still, that's no guarantee about the rest of the day/week/month. Both sides of the market are searching for direction in their own way. Stocks are faced with a decision about whether or not to press back up into all-time high territory or take the opportunity for…(read more)

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