Bonds Taking Defensive Lead-Off to Start Fed Week
Bonds Taking Defensive Lead-Off to Start Fed Week
Abstract
"All eyes are on the Fed" this Wednesday as the committee meets to decide whether to hike 75 vs 100bps. The path of least resistance for bonds is to "sell the rumor" of an increasingly hawkish Fed with some hope to be held out for "buying the news" The long end is under enough pressure to hit new long-term highs, but the short end remains under even more pressure. MBS share more in common with those shorter-duration bonds. The result has been bad for the mBS.
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