MBS RECAP: Fed’s Tricky Statement Lets Markets Choose Their Own Adventure

By Matthew Graham

Posted To: MBS Commentary

Today’s FOMC Announcement and ensuing press conference caused significant volatility (albeit, within a historically narrow range) for bond markets. One of the main reasons for the initial volatility is that the traditional methods of quickly sorting through the changes in the statement were more or less “broken” by the way the Fed put it together. It resulted in computer programs thinking there was an entire paragraph missing (the one that included “considerable time”), and an entirely new paragraph created (also with “considerable time!”). It ended up being easier to go old-school in examining the differences, so I slapped both statements on the same page and drew the following picture for you (click to make it big enough to read): Even that method ended up…(read more)

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