Very Tame Reaction to The Fed Despite Bond-Friendly Message

Bonds took a bit of a lead-off heading into today's Fed announcement as 10yr yields flirted with a break below 1.0% for the first time since cresting that level in early January.  As expected and hoped, the Fed statement was a snoozer.  If anything, it was bond-friendly and Powell's press conference even more so.  Still, bonds barely budged.  Stocks were much more volatile with S&P futures falling more than 3% by the end of the day.  Last but not least, here's an obligatory Game Stop price update: 339.7 at the close, more than doubling yesterday's close.

Econ Data / Events

  • Fed UMBS Schedule 10am, 1130am, 1pm

  • Durable Goods: 0.2 vs 0.9   (Core CapEx: 0.6 vs 0.6)

Market Movement Recap
09:09 AM

Bonds rallied moderately overnight with most of the gains seen during the European session.  Early domestic traders piled into the same trade, especially after the weaker-than-expected Durable Goods data.  Bonds have their sights set on a break below 1.0% in 10yr yields and are currently less than 1bp away.  MBS are up an eighth of a point and stocks are down more than 1%.

01:43 PM

MBS are back in line with AM levels after a late morning rally that took 1.5 coupons more than a quarter of a point higher on the day.  10yr yields were unable to crack below 1.0%, but remain within striking distance (1.014%).  Stocks are still down big (1.5%).

03:38 PM

Very quiet trading during and after Fed statement and Powell press conference.  Powell was utterly supportive, but markets assumed he would be.  Bonds moved a hair higher in yield, but are now back in line with pre-Fed levels (same as the last update, except stocks have continued to tank, now down 2.7%).