Posted To: MBS Commentary
Over the past 3-4 months, the prospect of fiscal stimulus has done major damage to the bond market. It wouldn’t have been a surprise to see more weakness this morning due to the confirmation that the full $1.9 trillion made it through the senate (which is as good as full passage because the senate was the only real hurdle to clear). Indeed, there was some weakness in the belly of the yield curve that some traders are chalking up to stimulus, but if that’s the case, it’s barely noticeable as the domestic session gets underway. The real issue is that yields are not stampeding lower after Friday’s drama. The more time we spend in this new, higher yield range, the more we’re confirming its validity. What’s the new, higher yield range? It’s still being defined, but here’s…(read more)
