MBS Outperform After Powell Discusses The Fed's Outlook

Abstract

MBS Outperform After Powell Discusses The Fed's Outlook The Fed stuck closely to the script in today's announcement, barely changing any verbiage and delivering the expected 75bp rate hike. The net effect was a strong performance for MBS with a reversal back to nearly unchanged levels for 10yr Treasuries. Quick pull-back after Durables data, but still in slightly stronger territory with 10s down 2bps and MBS up an eighth. 10yr down 3.6bps at 2.765 and MBS up more than a quarter point at 100-27. MBS and Treasuries are both exactly in line with levels from the previous update. 10yr down 3.6bps at 2.768 and MBS up 3/8ths of a point at 100-30. Weakness was/is centered on longer-dated Treasuries while MBS have been outperforming.