The Downside of Ultra Low Rates Actions and reactions are as true in the bond market as in the natural world. The equal and opposite reaction to a sub 3% 30yr fixed rate is a spike in the supply of new MBS. From there, supply/demand 101 says we should see downward pressure on prices. That’s exactly what happened after the Fed was done buying for the day. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Philly Fed Survey 24.1 vs 20.0 f’cast , 27.5 prev Jobless Claims 1.3m vs 1.25m f’cast , 1.31m prev Retail Sales 7.5 vs 5.0 f’cast , 18.2 prev NAHB Builder Confidence 72 vs 60 f’cast 58 prev Market Movement Recap 08:59 AM Bonds were stronger overnight, generally following weakness in stocks on yesterday’s covid numbers and bank earnings. The AM econ data helped
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