MBS RECAP: Everyone Sells Everything to Buy Snapchat (Not Really)

Posted To: MBS Commentary

You couldn't swing a dead cat without hitting a news story about the Snapchat IPO or a friend/colleague asking if you were going to buy some. While it's tempting to explain lower stock and bond prices by saying that everyone sold assets in order to buy snapchat, that's actually not what happened. Explaining today's market movement with Fed rate hike expectations is a far easier task –largely because if you chart rates and expectations, the lines are obviously moving together. As the chart suggests, it was Tuesday afternoon's comments from Fed's Dudley that did the most damage . Correlations were even stronger today though (notice how all three lines stay on top of each other after meeting up yesterday afternoon). In essence, the Dudley reaction left longer-term rates…(read more)

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Source: Mortgage News Daily

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