Harker and the curve...  It's not  a song or a morning radio show.

It's a reference to the Fed's Patrick Harker commenting on the yield curve today as well as the possibility of slowing down rate hikes in order to keep arrows in the quiver in the event the tax bill results in some sort of economic overheating.  In that case, the Fed would like to have some more room to hike rates without bringing them up to levels that would guarantee yield curve inversion (i.e. 2yr yields higher than 10yr yields).  

Such inversions are thought to precede recessions (and indeed they've reliably done just that, although past precedent is never a guarantee for anything in financial markets).

The important takeaway from the Harker comments was for traders who'd been focusing on trading the yield curve.  It had just hit another post-crisis record low (or "tight") this morning, and the comments were taken as a cue to reverse that trade.  Reversing the trade meant selling 10yr Treasuries relative to 2yr Treasuries.  That's why rates rose heading into the noon hour.

Before that, the post-NFP trade merely resulted in back-and-forth volatility that left rates unchanged on the day--just another piece of evidence that markets aren't too terribly interested in trading economic data, even if they're willing to react to it over short time horizons.


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
102-16 : -0-04
Treasuries
10 YR
2.4763 : +0.0233
Pricing as of 1/5/18 5:31PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:26PM  :  ALERT ISSUED: Negative Reprices Becoming Slightly More Likely
10:46AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:46AM  :  Bonds Rally (at first) on Weak NFP Numbers

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  ""did we say we'd hike rates when unemployment hit 6.5%? About that..." POOF! right in the eyes. Or who could forget this timeless classic? "Did we say we'd keep rates low until inflation was well on its way to historic norms? About that..." POOF! and they're gone..."
Matthew Graham  :  "it's a special powder only the Fed has. It's similar to the stuff ninjas throw in your eyes to blind you as they run away to attack from a different angle."
Andy Pada, Jr.  :  "'powder dry""
Matthew Graham  :  "RTRS - HARKER: WITH NO SIGN OF INFLATION, FED SHOULD KEEP POWDER DRY UNTIL CLEAR HOW TAX REFORM WILL IMPACT ECONOMY"
Matthew Graham  :  "RTRS - FED'S HARKER SAYS CAN TAKE SOME TIME FOR NEXT FED RATE HIKE"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Jan 05
8:30 Average earnings mm (%) Dec +0.3 0.3 0.2
8:30 Private Payrolls (k)* Dec +146 185 221
8:30 Non-farm payrolls (k)* Dec +148 190 228
8:30 Unemployment rate mm (%)* Dec 4.1 4.1 4.1
10:00 ISM N-Mfg Bus Act * Dec 57.3 61.0 61.4
10:00 ISM N-Mfg PMI * Dec 55.9 57.6 57.4
Tuesday, Jan 09
13:00 3-Yr Note Auction (bl) 24
Wednesday, Jan 10
7:00 Mortgage Market Index w/e 368.6
8:30 Export prices mm (%)* Dec 0.5
8:30 Import prices mm (%)* Dec 0.5 0.7
10:00 Wholesale inventories mm (%) Nov 0.7 0.7
13:00 10-yr Note Auction (bl)* 20
Thursday, Jan 11
8:30 Core Producer Prices YY (%)* Dec 2.5 2.4
8:30 Producer Prices (%) Dec 0.2 0.4
8:30 Jobless Claims (k) w/e 245 250
13:00 30-Yr Bond Auction (bl)* 12
Friday, Jan 12
8:30 Retail Sales (%)* Dec 0.5 0.8
8:30 Core CPI Year/Year (%)* Dec 1.7 1.7
8:30 CPI mm, sa (%)* Dec 0.2 0.4
10:00 Business Inventories (% ) Nov 0.3 -0.1