Apparently it took the 9:30am NYSE opening bell ringer for stocks to truly realize what just happened.  The Fed announcement on Wednesday was their way of saying "sorry" to stocks for the "steady as she goes" approach to tighter monetary policy in December.  As of Wednesday the Fed's median outlook for the Fed Funds Rate is now half a point lower for 2019-2020 and whereas Powell said in December that the balance sheet runoff was on autopilot with no reason for that to change, the just-announced change has the Fed completely doing away with balance sheet runoff on October 1st, and taking a $15bln/mo bite out of it starting in May.

So just to be clear... that's by far the biggest downward adjustment in the Fed's rate hike outlook we've seen in more than a decade followed by what will end up being an extra $40-50 bln a month in bond buying come October.  Yep!  It makes sense to see bonds at the best levels in a long time!

What didn't make a ton of sense was the fact that stocks initially rallied yesterday only to drop back to pre-Fed levels by the end of the day.  The bewilderment continued overnight as S&P futures fell to even lower levels.  But at 9:30am, the countdown was complete and the launch sequence began.  Stocks leaped to the best levels since early October, finally distancing themselves in a convincing way from the technical ceiling in the S&P (2815) that had was just starting to break this week.

If nothing else, bonds can hang their hat on the fact that they didn't lose much ground today even though investors were looking for more and more couch cushion money to throw into stocks.  10yr yields held below their own important technical level at 2.55% and MBS scratched out a modest victory with Fannie 3.5 coupons hitting 101.00.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
100-32 : +0-01
10 YR
2.5390 : +0.0020
Pricing as of 3/21/19 6:23PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:36PM  :  ALERT ISSUED: Negative Reprice Risk Considerations
9:28AM  :  Inconsequentially Weaker After Data (Still in Positive Territory)

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "curious to know how many of you have noticed the pricing advantage down at 4.125% and how likely you are to recommend buying down to that rate in order to take advantage of it (i.e. super cheap to go from 4.25% to 4.125%)"
Dan Draitser  :  "My borrower who works at the DMV is having problems getting someone from the IRS on the phone. #feeltheirony"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Mar 22
10:00 Wholesale inventories mm (%) Jan 0.2
10:00 Existing home sales (ml)* Feb 5.10 4.94
10:00 Exist. home sales % chg (%)* Feb 2.2 -1.2