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MBS RECAP: Bonds Recover as Friendly Powell Trumps Inflation Data (sort of…)

Posted To: MBS Commentary

Bonds Recover as Friendly Powell Trumps Inflation Data (sort of…) Producer prices surged in this morning's report at the same time that Powell's prepared remarks were released for this afternoon's congressional testimony. The subsequent improvement in bonds makes it tempting to credit Powell's speech for the victory. Powell certainly did no harm as he maintained the same stance seen in all recent communications but it's important to note that more than half the gains were intact by 8:30am. In retrospect, yesterday is looking more and more like "supply indigestion" for bonds, and today could thus be seen as a return to the prevailing baseline (apart from yesterday afternoon, 10yr yields have traded a very narrow range between 1.33 and 1.37 for 4 straight days…(read more)

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