Posted To: MBS Commentary
Big changes in the economic landscape bring big opportunities to consider whether bonds are priced where they should be. The entire spring and summer of 2020 was spent in such a pause for consideration as traders increasingly agreed that “peak covid” was worth 10yr yields in a narrow range surrounding 0.60%. The next 6 months saw rates move higher as market’s priced in an improved outlook. Then, starting this spring, we’ve seen a new series of pauses as traders consider what the near-term holding pattern should look like between now and whenever we feel like have enough data and progress against covid (or lack thereof) to decide on an appropriate rate range going forward. This week could be seen as an expedition to a new, lower-rate consolidation range. If that’s the case…(read more)
