Nine times out of ten, any conversation about trading volume in bond markets is pointless and dangerous when it comes to considering potential mortgage rate movement.  Reason being: some people assume that low volume means a move is less valid and then potentially feel like locking into weakness isn't a dire need.  The best thing to keep in mind with respect to that is that markets can always move either direction tomorrow and today's volume hardly ever tells you anything about the chances.

Here's what volume can tell us though.  It can tell us how much markets cared about the movement they just made.  This is a look at the past with no comment on the future. 

With that in mind, volume was surprisingly low in bond markets today.  It was lower than yesterday, and what even happened yesterday?!  It was more than 3 times lower than 10/16 and about 4 times lower than 10/15.  That's not the kind of activity we tend to see on Fed days that surprise markets. 

Arguably, today's announcement didn't offer many surprises.  The most shocking thing we could say about it is that the Fed was surprisingly confident.  Then again, I think this morning's commentary did a good job of addressing why that might turn out to be the case:

It would be a surprise to see a significant shift in the Fed's assessment of economic growth. Simply put, they have to expect the economy to 'keep on truckin' or else removal of accommodation would be like dividing by zero. Markets will really freak out if the Fed comes off as concerned while simultaneously firing off its second to last arrow (the last being zero rates).

As it turns out, the Fed took this logic to the extreme.  To hear them say it, things are looking really excellent for the economy, which is about the only scenario under which it would make sense to stop adding accommodation.  

Long story short, we didn't learn anything today.  We merely saw the Fed read from the script we knew they had, but with a little more gusto than most had been anticipating.   From here on out, we'll get to see what markets do in the post-QE3 era--especially next Thursday and Friday with the ECB Announcement and NFP data.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
100-02 : -0-03
FNMA 3.5
103-12 : -0-02
FNMA 4.0
106-03 : -0-02
Treasuries
2 YR
0.4850 : +0.0870
10 YR
2.3170 : +0.0170
30 YR
3.0480 : -0.0250
Pricing as of 10/29/14 5:02PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:25PM  :  Bond Markets Near Pre-FOMC Levels
2:54PM  :  More FOMC Differences (Cliff Note Version!)
2:29PM  :  Bullet Point Differences in Fed Statement (Part 1)
2:05PM  :  Differences Between Current and Previous FOMC Statements
2:02PM  :  ALERT ISSUED: First Move is Weaker Following FOMC Announcement
1:07PM  :  ALERT ISSUED: Incremental Increase in Reprice Risk After 5yr Auction
11:24AM  :  ALERT ISSUED: Negative Reprice Risk on the Horizon
9:37AM  :  US Bond Markets Walking Their Own Path (of weakness) Ahead of Fed
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason Wilborn  :  "considering we are only down a few ticks, I think it could be A LOT worse"
Scott Rieke  :  "Seriously, only 8 tick move on this Fed statement... that's telling."
Scott Rieke  :  "I'm impressed, the "move" is relatively small"
Matthew Graham  :  "I think I called this in the day ahead: " It would be a surprise to see a significant shift in the Fed's assessment of economic growth. Simply put, they have to expect the economy to 'keep on truckin' or else removal of accommodation would be like dividing by zero.""
Jason Wilborn  :  "we may the price today and maybe for a few weeks, but rates go down in the long run as the economy continues to stall and sputter. Reality, when it is bad, usually take a long time for people to admit it"
Oliver Orlicki  :  "reprices are gooing to be coming"
Oliver Orlicki  :  "not liking this right now"
Matthew Graham  :  "they're way more upbeat"
Matthew Graham  :  "hawkish"
Scott Rieke  :  "bullish meaning dovish or hawkish?"
Matt Hodges  :  "way too bullish for the current economy"
Matthew Graham  :  "fairly bullish statement "
Matthew Graham  :  "RTRS- FED SAYS EXPECTS ECONOMY TO EXPAND AT MODERATE PACE, LABOR MARKET TO IMPROVE SOMEWHAT FURTHER; RISKS TO OUTLOOK "NEARLY BALANCED""
Matthew Graham  :  "RTRS- FED SAYS TIMING OF INCREASES IN FED FUNDS RATE WILL DEPEND ON INCOMING INFORMATION RELATING TO PROGRESS TOWARD COMMITTEE'S OBJECTIVES"
Matthew Graham  :  "RTRS- FED SAYS RANGE OF LABOR MARKET INDICATORS SUGGESTS UNDERUTILIZATION OF LABOR RESOURCES GRADUALLY DIMINISHING"
Matthew Graham  :  "RTRS - FED SAYS MARKET-BASED MEASURES OF INFLATION COMPENSATION HAVE DECLINED SOMEWHAT, MEASURES OF LONGER-TERM INFLATION EXPECTATIONS HAVE REMAINED STABLE"
Matthew Graham  :  "RTRS- FED SAYS HIGHLY ACCOMMODATIVE POLICY TO BE APPROPRIATE FOR "CONSIDERABLE TIME" FOLLOWING THE END OF ITS ASSET PURCHASE PROGRAM THIS MONTH"
Christopher Stevens  :  "thank goodness for the mobile app"
Christopher Stevens  :  "perfect just got called in to a 2pm meeting"
Matthew Graham  :  "This is a new and much more boldly confident Fed. They are not being shy about saying "Mission Accomplished!" I'm not sure which version is sillier. The one where they were nervously justifying their stance or this one where everything is almost magically better."