Waller Unintentionally Sends Yields Higher

The most hotly anticipated calendar event at the start of this holiday-shortened week was a Q&A with the Fed's Christopher Waller, hosted by Brookings.  The questions were as solid as you'd expect from David Wessel and Waller's answers were informative--at least for market participants who may have misunderstood his role in the current Fed canon. Specifically, Waller has been dovish in terms of his impact on rates of late.  Today, his comments were hawkish--not because they were actually hawkish, but rather because they weren't as dovish as traders expected.  Rates reacted accordingly with both MBS and Treasuries losing more than a small amount of ground.