MBS UPDATE: Treasuries Hammered While Mortgages Get Fed Bid

"Fed Bid" as in the Fed is feeding the bid.....haha I crack myself up!

40,000,000,000 2 yr notes + 35,000,000,000 5 yr notes + 26,000,000,000 7 yr notes = 101,000,000,000 in new supply next week. Oh and dont forget the $70 some odd billion in 3s/10s/30s the following week.

Thats a lot of zeros for fixed income to digest....well its a lot of zeros for the Fed to digest. Seems the market is buying from the Treasury only to sell to the Fed. Nice little market maker the Fed is huh? Anyway this supply and a looming desire to pre-board the Hampton Jitney is keeping TSY traders BEARISH and DEFENSIVE. It looks like a seller of size just dumped a boat load of TSY notes...central bank perhaps?

But...while the 10 yr gets beat on...

The Fed is exerting PAR-NERTIA on "rate sheet influential" MBS coupons. The range moderates...thank you Fed!