MBS RECAP: Things Could Get Very Interesting Very Quickly For Stocks/Bonds

Posted To: MBS Commentary

If there was one catalyst for the overall surge toward higher stocks and rates at the end of 2016, it was the expectation that the new administration's policies would do " something ." "Something" took on several forms depending on whom you asked, but the most popular definition was some combination of increased growth prospects, increased inflation , and a faster Fed rate hike timeline. Slightly off the beaten path was the notion that the promise of tax cuts juiced the stock market, but that's definitely a consideration. In fact, tax cuts are arguably an integral component of the other components (i.e. they're expected to contribute to growth, which begets inflation, which begets a hawkish Fed). If the new administration and congress aren't going to tackle…(read more)

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Source: Mortgage News Daily

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