Posted To: MBS Commentary
It’s an interesting time for rates because the market collectively knows where it should be going (i.e. toward even higher rates), yet seems to be dragging its feet in getting there. That’s not to say rates aren’t higher in the past few weeks, but 10yr yields continue to avoid a decisive break above the high yields seen on Friday the 8th. What about other Treasury maturities though? A quick glance at the 30yr and 5yr helps bring everything into focus. Translation: 5yr yields are doing a half of a point worse than 30yr yields in the past 5 months (in fact, these are the highest 5yr yields since before the pandemic). What’s up with that? 5s are uniquely positioned to suffer in this environment. They’re long-term enough to share some concerns with 10s and 30s, but short-term…(read more)
