Some Volatility After Fed, No Clear Directional Preference Yet (Leaning Negative)
While bond markets are noticeable more active in the minutes following the FOMC Announcement, there's no clear break in either direction so far. The few brief moves out of the pre-Fed range have been higher in yield in terms of Treasuries, but have gone both higher and lower in MBS.
The range of movement in this case is a very small 104-19 to 104-24 in Fannie 4.0s. They're currently at 104-21, which is where they spent most of the last 3 hours.
Very little about the Fed Announcement was changed. The first paragraph tweaked some verbiage to place even more emphasis on the weather effect and add some more certainty that we're putting it behind us--nothing the data hasn't already suggested. The only other change is the sentence that notes household spending is rising more quickly and business investment 'edged down.'
Whether or not these slight bullish and bearish changes cancel each other out remains to be seen. If there's one concern for the afternoon at the moment, it's the technical resistance that 10yr yields have run into at 2.657. Until and unless 10's want to break any lower than that, it makes more sense to be defensive, or at least ready to lock.
Negative reprices shouldn't be much of a risk unless 4.0s fall below 104-19, and even then that would be more of an early warning sign. Don't be complacent though. Treasuries do look like they're thinking more about moving higher in yield vs lower.