There is surely a great analogy to be made about perspective (categorized as “everything is relative”). Bonds rallied rather well today with 10-year yields having their best domestic trading session since before the Fed’s last announcement. MBS didn’t do as well, but we didn’t expect them to do given the shape of the yield curve (shorter-dated bonds don’t perform as well as long-dated bonds. longer duration). But (wait …) everything is relative! The 10 year rates at 1.64% are only good news compared to the last 2 days. If you missed those 2 days, then today is not so much a “nice rally” as a confirmation that rates are at their highest levels since April.

08:49

Lateral to slightly stronger overnight when the level of 1.70% of 10-year rates is favorable for the moment. Down 1.9bp to 1.677% currently and 2.5 UMBS are up nearly an eighth.

10:41 a.m.

Gains continued moderately. 10yr now down 3.8bp to 1.658 and 2.5 UMBS up 5 ticks (0.19) to 102-05 (102.16). No major market player at stake, just short coverage after a week of heavy selling.

11:29 a.m.

Quick losses after Powell said he was “ready to cut”. MBS fell back to the unchanged level, but stabilized up 3 ticks (.09). 10 years still down 3 basis points to 1.665.

4:23 p.m.

Links that move forward on weekends like … well, no time for memes. Bonds improved further this afternoon with UMBS 2.5 up almost a quarter point and 10-year yields down 5.5 bps to 1.641.