Today's Fed announcement turned out to be a dud.  It's getting headline treatment here based solely on street cred.  In and of itself, it could scarcely compete with today's AM economic calendar.  Of particular interest was the Treasury's quarterly refunding announcement.

Normally a sleeper of a market mover, the refunding announcement was more closely scrutinized this time around for two reasons.  First, traders wanted to see if there would be any increase in Treasury issuance to offset new spending plans.  Beyond that, the announcement served as an opportunity to debut the longer-term bonds that Mnuchin has mentioned on several occasions recently.

As it happens, the longer term bonds were mentioned, but they weren't announced outright (to paraphrase, they're "currently studying the possibility of issuing bonds with maturities greater than 30 years").  While this was big news in terms of volume, it was more of a money shuffle among existing Treasury trading positions.  

The Fed statement indeed ended up being the big market mover of the day (which isn't saying much today), but that has just as much to do with traders needing to wait and see what the Fed DIDN'T say as opposed to needing to react to what they DID say.  

They didn't say much--essentially telling us about the gloomier Q1 developments (which we already know about) in a non-gloomy way.  The traders who were hoping the Fed wouldn't pull punches were then forced to hop on the bandwagon of bond selling.  Despite all that, 10yr yields still managed an "inside day" (today's yields remaining inside yesterday's range.  Given today's calendar, an inside day is the ultimate expression of a market that's anxiously awaiting a true source of inspiration.


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
102-22 : -0-05
Treasuries
10 YR
2.3216 : +0.0256
Pricing as of 5/3/17 5:11PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:37PM  :  ALERT ISSUED: Negative Reprices Now Becoming Likely
2:24PM  :  ALERT ISSUED: Reprice Risk Now Increasing Somewhat
2:20PM  :  Paraphrased Fed Statement
2:09PM  :  FOMC Bullet Points (Corrected)
2:05PM  :  FOMC Bullet Points
2:02PM  :  ALERT ISSUED: First Move After FOMC is Only Slightly Weaker for Bonds
10:59AM  :  Supportive Bounce; Reprice Risk Ebbs
10:26AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
10:03AM  :  ISM Services Much Stronger Than Expected; Some Pressure on Bonds
8:27AM  :  Stronger After ADP Data At First, But Bouncing Weaker on Revisions/CME Open

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "Bond mkt weaker all day. Boring FED stmt already baked in with bond mkt."
Hugh W. Page  :  "All Q1 data is forever considered "transitory". It's the new rule."
Jeff Anderson  :  "Still transitory and waiting for normalization almost a decade after the crisis."
Matthew Graham  :  "RTRS - FED REPEATS IT WILL REINVEST PRINCIPAL PAYMENTS FROM ITS HOLDINGS UNTIL RATE NORMALIZATION IS WELL UNDER WAY"
Matthew Graham  :  "RTRS - FED REPEATS NEAR-TERM RISKS TO THE ECONOMY APPEAR "ROUGHLY BALANCED""
Matthew Graham  :  "RTRS - FED SAYS INFLATION MEASURED ON 12-MONTH BASIS HAS BEEN RUNNING CLOSE TO TARGET"
Matthew Graham  :  "RTRS - FED SAYS BUSINESS FIXED INVESTMENT HAS FIRMED, JOB GAINS HAVE BEEN SOLID AND FUNDAMENTALS FOR CONSUMPTION GROWTH ALSO SOLID"
Matthew Graham  :  "RTRS- FED SAYS SLOWDOWN IN FIRST-QUARTER GROWTH LIKELY TO BE "TRANSITORY," STILL EXPECTS ECONOMY TO EXPAND AT MODERATE PACE"
Matthew Graham  :  "RTRS- FED KEEPS TARGET INTEREST RATE UNCHANGED AT 0.75-1.00 PCT"