As expected, today's Fed Minutes were a non-event.  Well, almost...  While the bulk of the Minutes release was simply a wordier version of the October Fed Announcement, there was a subtle addition that--in conjunction with recent Fed comments--bears ongoing observation. 

Actually, it wasn't so subtle.  The minutes spent several paragraphs recounting a discussion and the presentation of models regarding the lowering of the short and long term "natural" Fed Funds Rate--a magical level that keeps the US economy at equilibrium with full employment and price stability.  The simplest way to think of it would be to say if the Fed hiked to the natural rate right now, and if nothing else in the world changed, unemployment and inflation would hold steady.

At the end of those paragraphs, the Minutes indicated "some participants" said it would be good to have additional policy tools in case rates get stuck too close to zero, thus robbing the policy rate of its traditionally perceived power.  This is actually a pretty big deal, and we'll definitely be talking more about it in the coming days, but markets only cared about whether the Fed seemed to deviate from its rate hike stance from the October statement.  It did not, and so bonds did nothing with the data.  To be fair, stocks did move higher, but most of their move off the lows happened from 6am to noon Eastern. 

Bond markets ended the day almost perfectly unchanged, and made no further attempts to break today's highs or lows.  In other words, there was a consolidation ahead of the Fed, and trading levels didn't even break out of that consolidative pattern after the Fed.  Normally when bonds consolidate ahead of a key event, they'll break out of that triangular trading pattern after the event.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
100-03 : +0-01
FNMA 3.5
103-10 : +0-01
FNMA 4.0
105-30 : +0-01
Treasuries
2 YR
0.8800 : +0.0210
10 YR
2.2730 : +0.0050
30 YR
3.0430 : -0.0110
Pricing as of 11/18/15 6:21PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:12PM  :  Fed Minutes a Non-Event So Far
10:14AM  :  Bonds Trading an "Inside Day" Ahead of Fed

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "the "in case rate stuck close to zero" is the interesting part to me"
Andy Pada, Jr.  :  "if anything, seems like the doves still want their cries heard"
Dominick Cordone  :  "agree witth oo"
Oliver Orlicki  :  "Sounds dovish to me"
Andy Pada, Jr.  :  "doesn't hurt us"
John Tassios  :  "all of this is already built in to bond market"
Matthew Graham  :  "yawn"
Matthew Graham  :  "RTRS- FED POLICYMAKERS NOTED U.S. FINANCIAL SYSTEM APPEARED TO WEATHER GLOBAL FINANCIAL TURBULENCE WITHOUT ANY SIGN OF SYSTEMIC STRESS"
Matthew Graham  :  "RTRS- - FED POLICYMAKERS SAW REFERENCE TO DEC MEETING IN OCT STATEMENT AS "LEAVING POLICY OPTIONS OPEN" FOR NEXT MEETING; A COUPLE WORRIED THIS COULD SIGNAL TOO STRONGLY THE EXPECTATION OF A DEC HIKE"
Matthew Graham  :  "RTRS- MOST POLICYMAKERS SAW DOWNSIDE RISKS FROM GLOBAL ECONOMIC AND FINANCIAL DEVELOPMENTS AS HAVING DIMINISHED"
Matthew Graham  :  "RTRS- SOME POLICYMAKERS SAID WOULD BE PRUDENT TO HAVE ADDITIONAL POLICY TOOLS IN CASE FED POLICY RATE STUCK PERSISTENTLY CLOSER TO ZERO -MINUTES"
Matthew Graham  :  "RTRS - MOST POLICYMAKERS AT OCT 27-28 FOMC MEETING ANTICIPATED U.S. ECONOMIC CONDITIONS AND OUTLOOK COULD WELL WARRANT RATE HIKE AT DECEMBER MEETING -MINUTES"