Posted To: MBS Commentary

If Yesterday’s big to-do was Fed Chair Powell’s testimony, today’s will be the 5yr Treasury auction. Notably, Powell didn’t have a big impact. His comments did more to confirm the trading that had already taken place in the past few weeks. The Treasury auction is a bit trickier due to the 5yr note’s location on the yield curve. The 5yr is sort of in the middle ground when it comes to the yield curve. It’s short enough to escape much of the pain experienced by 10s and 30s when the curve is steepening but long enough to avoid being beholden to the Fed Funds Rate outlook (unlike 2yr notes, for instance). If all of the above is confusing, consider the following chart. It shows the longer end of the yield curve at the highest levels, but making the strongest gains in the…(read more)

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Published On: June 23, 2021 / Categories: Mortgage News /

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