Today's news was largely out yesterday: the Fed will probably reevaluate their exit strategy last spelled out in 2011--yes, the 2011 that was 3 years ago. Clearly, the state of the global economy was different in many ways then, so a reevaluation is scarcely a surprise.
The key issue suddenly seems to be that of reinvesting the principal payments from the Fed's asset portfolio back into the markets from which those payments came. The 2011 verbiage said those reinvestments would be the first thing to go after asset purchases were wound down. But yesterday, NY Fed President Dudley said that might not be such a good idea. Markets reacted to that yesterday afternoon, and were thus left with not much to react to when Today's Minutes said the Fed did indeed discuss this "stuff."
Perhaps if the Minutes held another bullet-pointed exit strategy section as they did in 2011, we would have seen more of a reaction. As it stands, we got nothing more than yesterday's hints, and another late-day speech from San Francisco Fed President Williams in which he said the same thing about reinvestments.
Long story short, the longer the Fed is reinvesting MBS proceeds back into MBS, the better it is for prices--especially for prices relative to Treasury benchmarks (because the Fed had previously said they intended to get back to a primarily Treasury portfolio). As such, it's no surprise to see MBS continuing to outperform with Fannie 3.5s breaking even by the end of the day whereas Treasuries were in the red across the board.
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