More than a few bond bulls out there (those are folks who want rates to go lower!) were eager for the vote to take place on the healthcare bill that drew most of the market's attention this week.  They figured one of two things would happen.  Most likely, there weren't enough votes for the bill to pass.  It would fail, and that would be great for bonds.  

Alternatively, they hoped that if the bill did pass, that it would have been changed so much that it still cast doubt on the new administration's ability to push its policy agenda.  You'd be hard-pressed to find a trader who wouldn't have agreed that one of those 2 outcomes was more likely than a clean passage of the bill.

Instead of any of those options, markets were dealt a wild card in the form of a postponement of the vote.  This worked against bond bulls because it keeps hope alive that politicians can do what politicians do and cobble together some sort of legislation after days and weeks of posturing, wrangling, and horse-trading.  

In other words, the postponement leaves the door open for this whole week to look like normal politics in retrospect.  That's the sort of thing that bond bulls have a healthy fear of, because if it happens with tax reform, it will justify much of the late 2016 rate spike.


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
101-32 : -0-02
Treasuries
10 YR
2.4213 : +0.0033
Pricing as of 3/24/17 4:36PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:26PM  :  ALERT ISSUED: Reprice Risk Increasing as Sell-Off Intensifies
3:49PM  :  Healthcare Bill Pulled; Limited Negative bond Market Reaction
1:18PM  :  Bonds Gain as Healthcare Bill Outlook Remains Uncertain
8:38AM  :  Mixed Signals From Durable Goods Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "just remember, rates have to go up in order to go down, so we wouldn't want that to happen too soon or too big."
Matthew Graham  :  "Ability to push fiscal policies through congress to be called into question?"
B C  :  "this is what i been waiting for since November when we sold off actually. ty"
Matthew Graham  :  "i wouldn't try to divine the implications for healthcare itself. This is all about a vote of confidence on the fiscal policy changes that markets are more interested in."
Caroline Roy  :  "you might want to re-read up on the bill, but yes to bonds from what MG has said."
David Rudnick  :  "so vote pass... bad for bonds, good for insurance premiums? vote blocked good for bonds, good for HC stocks?"
Matthew Graham  :  "No one's sure exactly what to expect. The reaction will definitely be noticeable. I mean the biggest volume spike of the day happened just now on those headlines, so you can imagine what more definitive news could do. I also think there's potential for a bigger reaction if any of the developments suggest challenges getting other fiscal policy through congress"
Matt Hodges  :  "MG - your last line. Essentially, if R Congress won't support this signature bill, other inflationary bills will likely face same outcome by an emboldened Representative or Senator?"