Today brought the (not very) much-anticipated FOMC Minutes--a more detailed account of the conversation that transpired at the end of July when the Fed announced its rate cut.  As expected, some at the Fed wanted to cut more.  Some wanted to cut less.  The consensus was that it was a mid-cycle rate adjustment that left room for the Fed to hike again or cut again depending upon how conditions evolve.

This was perhaps somewhat less upbeat than some market participants may have hoped, but not so much so that we should credit the Fed as a market mover today.  I'm more inclined to give the Fed some credit for nudging rate expectations microscopically higher and give the consolidation range credit for turning away the post-Fed rally in 10yr yields.  To be clear, this is exactly in line with my pre-Fed outlook update that pointed out a divergence in Fed Fund Futures and the 10yr (this one).

The chart above paints the consolidative picture that matters.  If yields move much above 1.62%, we can talk about the possibility of additional weakness making a dent in the new rate narrative.  Even then, it would take a lot more weakness before we could agree that the new range is being rejected.

On a positive note, MBS lost much less ground than Treasuries.  On a negative note, when those losses were combined with yesterday afternoon's losses, it was enough for a few lenders to move up to their highest rate offerings in well over a week.