MBS RECAP: Bonds Push Back After Weaker Start on Tax Bill Passage

Posted To: MBS Commentary

Friday evening brought the passage of the Senate’s version of the tax bill. It now moves to a joint session for “reconciliation” (Senate+House trying to craft a final bill before Christmas). As noted in the Day Ahead, unless lawmakers opt to cut their vacations short (which is very uncommon, but technically possible), “by Christmas” means “within 2 weeks.” Bonds have done quite a lot to price-in the effects of a tax bill (by moving higher in yield since September) and only had a little more selling to do in honor of the Senate’s official vote. Friday’s Flynn news was mostly traded by the close of business. The weakness was primarily seen right out of the gate (i.e. early in the overnight session), with the rest of the session being devoted to a gentle…(read more)

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