Working Our Way Back to Powell

The last Fed meeting in June wasn't a huge market mover in and of itself, but it did set the stage for Powell to talk about the dots and for markets to understand how low the bar would be for another 50bps of Fed rate hikes.  Then when the data lined up with Powell's warnings in late June, rates spiked.  That was 2 weeks ago.  Last week offered recovery after the CPI data and bonds have been content to remain in the sideways range that preceded all of the above.  Exactly one week from now, we'll hear from Powell again--hopefully to let us know that the Fed is seeing more of what it wants to see.  Between now and then, the least surprising course for bonds would be "sideways in a narrow range."

Econ Data / Events
    • Housing Starts
      • 1.434m vs 1.48m f'cast
    • Building Permits
      • 1.44m vs 1.49m f'cast
Market Movement Recap
10:37 AM

Steady losses since 8:30am, now leveling off.  10yr down .6bps at 3.783.  MBS up 2 ticks (.06).

03:03 PM

Stronger afternoon led by the long end of the yield curve.  10yr down 4.7 bps at 3.742.  MBS up an eighth of a point.

04:54 PM

Flat all afternoon.  MBS up 3 ticks (0.09). 10yr down 4bps at 3.75.

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