• 4.5's up 8 ticks on the day to 101-04
• 10yr Tsy yield down just over 4bps to 3.65
• S&P at 1159 (highest since sept. 2008, 9 pts higher than Friday)

AQ brought you up to speed on FOMC statement, and the rest of the day has been pretty easy: just sit back and enjoy the healthy (but not insane) rally...

Both MBS and Tsy's look to be honing in on their ranges established just after FOMC.  A bit more volatility in MBS at the moment, but take some solace by the stronger and steadier showing from benchmark big brother: 10yr tsy.  It's not like we're not expected to widen out from 10's, but when the benchmark is stable into a rally, it's one more variable we do not have to account for in identifying threats to pricing.

Look for reprices for the better if you haven't seen them already.  And perhaps a bit of time to consider the extent to which these gains are reflected in repriced sheets.  I was certainly more "floaty" last night, but that aggressiveness might throttle back a click or two if I saw gains make their way through to rate sheets.  Consider tomorrow is a big test for stocks to see if they will hold over 1150, and data is fairly sparse.  Still, the stock lever can't be relied upon until the post FOMC happiness officially leaves the building. 

Bottom line, arguments were a bit skewed in favor of floating yesterday, whereas they are more balanced today.  However, this factors in some trending weakness in MBS spreads which, if absent, would allow for some ongoing bullishness.  Sorry for that uncertainty, but if anyone knows where spreads are going and when, please let everyone else know...  It's an unknown we'll be dealing with in weeks to follow.

HERE is the MND Forecast