It may have seemed that we were paying too much attention to today's dot plot on the approach, but hindsight suggests it could not have been overdone. Rates plummeted as the dots revealed that September's big revision was completely erased (in Sept, Fed members priced in 50bps of "higher for longer in 2024"). After the dots, some market watchers worried that Powell would push back on the rally in order to temper the volatility. He did not. He simply said the same things he's been saying. Hikes are likely done unless data manages to surprise in an inflationary way. Bonds rejoice across the curve.
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- Core PPI m/m
- 0.0 vs 0.2 f'cast
- Core PPI m/m
Gradually stronger overnight with modest additional gains after PPI data. MBS up 5 ticks (.16) and 10yr down 4bps at 4.17.
Some illiquidity in MBS, currently up 3 ticks (.09), but briefly showing as being down more than an eighth. 10yr down 3.6bps at 4.174
A bit weaker ahead of the Fed. MBS still up 1 tick (0.03) but down 3-4 ticks from highs. 10yr down 4.4bps on the day at 4.166.
First move is stronger after the DOTS. 10yr down 11bps at 4.10. MBS up half a point in 5.5 coupons.
Mostly holding massive gains seen during Powell's press conference. 10yr down 18bps at 4.03. MBS up nearly a point in 5.5 coupons and nearly 5/8ths in 6.0 coupons.
MBS Market Alerts
