Posted To: MBS CommentaryWhether you thought the election would or would not matter for the bond market, you were right! At times, it mattered quite a bit in the overnight session, but as we begin the day, trading levels are arguably close enough to yesterday’s that no one needs to shout from the rooftops about imminent sea-changes. Refreshingly, the election had exactly the impact we suspected in terms of the correlation between democrats taking the House and lower rates. That’s not because democrats have anything more to do with rates than republicans. Rather, it’s been unchecked government spending (or specifically, revenue shortfall from the tax bill) that has pushed rates higher due to increased Treasury issuance, and indirectly via a hotter running economy due to the stimulative effects of the fiscal…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS Day Ahead: Here’s How The Election Impacted Bonds (And How It Didn’t)
