MBS Day Ahead: Where Would We Be Without Stocks?
Posted To: MBS Commentary
It's no secret that the bond market has been sideways for a month and a half by even the strictest definitions, and broadly sideways since first settling down from the initial covid-related volatility in March. In terms of specific levels, that's .63 – .79 for 10yr yields since August and .50 – .95 going back to March. No one is under the illusion that rates should be moving consistently higher after last bottoming out in early August. The market knows we're in for a reasonably long haul of historically low rates due to Covid. The market also knows that the fight against Covid means increased Treasury issuance (for a variety of reasons apart from stimulus) and persistently more effort to stoke inflationary fires from the Fed. Both exert some measure of upward pressure on rates to…(read more)