MBS Day Ahead: Are Markets Confused Again?

What's up with this?  Wasn't the Fed meeting last week supposed to bring some clarity to the long-suffering sideways trend that had been mostly intact since early August?  Depending on when we've checked back in with that trend, it's given hints that it might be going in one direction or the other. 

At first, it looked like it wasn't even going to wait for the Fed as yields burst higher on the Tuesday leading up to the announcement.  Following the announcement, yields had their best 2 days in more than a month, hinting that the breakout might come in the other direction.

But now, the sideways trend increasingly looks--well... sideways.  Despite a solid attack on the lower boundary yesterday, yields were turned away from 2.10 yet again.  At this point the only breaks have occurred during the late August market turmoil and on that painful Tuesday before the Fed. 

If that wasn't enough to convince you that markets are confused, take a look at stocks versus 10yr yields.  The two only huddle this closely together for this long when neither has any clue about where they're going or why.

Will today's data help clear this up?  Not likely.  The only headliner is GDP at 8:30am, and it's the Final version, which means it's super duper old.  For example, the data gathered for tomorrow's GDP report was from the months of April, May, and June.  Apart from that, markets will be left to trade Yellen's weird speech from last night, in which she seemingly recanted the economic bearishness of last week.  So there you have it, even the head of the most powerful central bank in the world isn't committing or refusing to commit to doing something new.  Why should markets?