• GDP was +0.8 vs +0.9 forecast this morning
  • Consumer Sentiment was 94.7 vs 95.4
  • Inflation expectations were the lowest since 2010
  • But markets didn't trade any of that data
  • Anyone who was still working, was waiting to see if Yellen would say something
  • She did, and the 3 people still working sold bonds

These pre-holiday half-days are fairly pointless, and only really exist as a courtesy to the folks who need access to financial markets for operational reasons.  To a lesser extent, they also provide another day for economic data releases without needing to reschedule them, potentially clogging up the calendar on a more worthwhile day.  

Harvard and Yellen made markets wait until half an hour before the early close to find out if she would say anything about monetary policy.  She did.  It was generic and boring.

"It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate."

Markets wanted a yay or nay verdict from Yellen on all the recent chatter about a June or July hike.  This verdict was essentially an agreement with that chatter.  A few market participants held out hope that Yellen would push back on those recent comments with a bit more bond-friendly tone.  When she did not, a few traders sold a few bonds and it had an outsized effect on trading levels due to low volume.  Even then, 10yr yields ended the day up only 2.5bps and Fannie 3.0s closed down only 2 ticks.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
102-09 : +0-00
10 YR
1.8560 : +0.0330
Pricing as of 5/27/16 2:04PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:43PM  :  ALERT ISSUED: Bonds a Tad Weaker After Obligatory Yellen Comment
10:43AM  :  No Impact From Data; Effectively Unchanged Ahead of Yellen

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "traders are done for the day anyway. Some dude with a larger-than-average TD Ameritrade account could cause what looks like a massive move between now and 2pm"