We know the Fed will hike tomorrow and we know the "dots" (a reference to the dot-plot the Fed uses to convey it's rate hike expectations) will be the true market mover.  Where did that leave us today?

The only data on tap was the Producer Price Index.  It was slightly stronger than expected, but expectations called for only a 0.1% increase this month vs a +0.6% increase last month.  It passed without much notice.

Stocks and bonds generally huddled together with stock prices moving lower in relative proportion to bond yields.  Neither moved much in the bigger picture because both are essentially "in their seats" for tomorrow's big show.  It stands to reason, to some extent, that rates would be staging at their upper range boundary, ready for a potential break higher if the Fed increases its rate hike outlook by more than expected.

As for those 'expectations,' we won't know where they are until after the announcement.  We can assume that markets are expecting SOME acceleration in the dots.  That leaves a small window of opportunity open for bonds to continue to hold this ground.  Risks for a move higher are easily as big, if not bigger.


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 3.5
100-28 : +0-04
Treasuries
10 YR
2.6021 : -0.0049
Pricing as of 3/14/17 5:50PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:50AM  :  Slightly Stronger PPI Raises Roadblock For Morning Rally

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Not because of a short-term bill auction. Not relevant at all. That doesn't mean there's no way to be 'hopeful' though."
Gerry Suarez  :  "MG- I know it was only a 4wk auction, but heard it was pretty dismal. Market seemed to have just shrugged it off... Given the weakness we've had, where everything seems to be an excuse for to push rates higher, is this a smidgen of hope?"
Matthew Graham  :  "The Bloomberg "Hedge Funds..." article in the news stream at 1:27pm ET is a good read/listen for a good counterargument to the prevailing negative momentum in bonds. Long story short: "maybe markets have over-prepared for an acceleration in the Fed's rate hike expectations.""