Bond markets have been slightly more active today both in terms of volume and volatility.  Overnight trading was essentially a wash.  10yr yields were almost perfectly unchanged by 8am.  Shortly thereafter, headlines concerning Putin's willingness to discuss ways to resolve the Ukraine crisis made for a modest amount of weakness in bond markets.

With that, MBS and Treasuries began the day in slightly weaker territory, but began to recover in fairly linear fashion.  Things got less linear right as Yellen's prepared remarks were released, but after spending a few minutes in both weaker and stronger territory, the rally returned to its previous trajectory.

Yellen didn't have any surprises for markets, but the absence of negative surprises is good enough for bond markets to keep the pressure on the range boundaries.  10yr yields are at 2.588, with 2.57 being the lowest edge of the range.  Fannie 4.0s are 5 ticks higher at 105-13, well past their higher end of the range through February, but set to "roll" tomorrow night, thus shedding at least enough to bring prices back within the range.  Even so, rates are the lowest they've been since November, but we still don't have a convicted attempt to break the longer term range.  That said, we look more ready to do that than we have at any other time this year.