MBS RECAP: Bonds Dragged Into Danger Zone Ahead of Tax Vote

Posted To: MBS Commentary

As discussed in detail in the daily video on MBS Live , today’s bond market weakness was multifaceted , to say the least. But if we want to make the move higher in stocks and bond yields about one thing and one thing only, we can continue to talk about the prospects for the tax bill passing. In that regard, today’s big to-do was a change of heart from Senator McCain who previously said he wouldn’t vote for the bill. Now he will, and that gives the Senate enough votes to try to pass the thing tonight or tomorrow. The rally in the stock market was more gradual and lasted longer than the mover higher in bond yields. It was also much bigger relative to recent ranges. The exuberance in stocks, alone, could explain some of the weakness in bonds as investors sell bonds to buy stocks. Even…(read more)

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