If we wanted to do as little as possible to overcomplicate yesterday's Fed news, we might focus on the fact that the Fed took their greatest strides yet in adding a new dimension to their job description.  We're talking about the mention of "recent global economic and financial developments" putting downward pressure on inflation. 

The argument that this circuitously leads back to the Fed's inflation mandate is too much of a stretch.  If the Fed speculated on every threat to its mandates, they couldn't possibly function.  They must necessarily wait for actual trends in inflation and labor markets before acting.  It's not their job to speculate on the Chinese economy and its effects on domestic inflation and job growth.

Nevertheless, they've made it their job, and that can't help but create downward pressure on rates.  Why?  Because the global economy sucks!  Apart from the policy implications, there's an even more important tacit implication: The Fed is concerned enough by the global economy that they bent their rules in order to address it.  It's a clue, if you will, as to just how much of a concern the aforementioned 'suckiness' could be.

The rest of the world got its chance to consider that in the overnight session, and did the only logical thing it could: sold stocks and bought bonds.  And here we are with marginal additional gains in Treasuries and MBS.


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 3.0
100-29 : +0-05
FNMA 3.5
104-02 : +0-04
FNMA 4.0
106-18 : +0-03
Treasuries
2 YR
0.6860 : +0.0000
10 YR
2.1600 : -0.0320
30 YR
2.9640 : -0.0450
Pricing as of 9/18/15 10:47AMEST

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "that long term trend is too big to have been derailed in a day, week, or month. That chart was in yesterday's Day Ahead, and I think I said 10yr would need to go well over 3% to threaten it."
Michael Baker  :  "MG: Yesterdays reaction to the FOMC...Did the reverse the prior concern we had about breaking a 20yr+ cycle of downward pressure on rates, as the May/June action indicated a possible break in that trend, but the action over the last 30 days coupled with yesterdays statement (Adding global growth into Fed policy/consideration) seem to have re-affirmed our down trajectory? (Wow...that is one long question)"
Nathan Stotlar  :  "The difference could be between the true LPMI rates and SPMI. Strangely enough there are differences in those rates."
Jason Lowe  :  "Doug, I can't confirm what they are offering, but I could do 4.625 late yesterday with the same scenario through Franklin."
Doug Seder  :  "Is any familiar with Prime Lending's 95% LPMI loan, my client is getting a quote that seems WAY out of market. 717 FICO, 95 LVT, LPMI at 4.75% with a $375 lender credit on a $200,000 purchase price. My best LPMI option is 3.10 (UG), I can cover most some of the 3.10, but not all of it plus a 0.198 lender credit...."