Yesterday was the worst day in mortgage bond (MBS) markets since December 15, 2010, and rates skyrocketed past 2013 highs. Today MBS markets are about par, so no more bleeding so far but yesterday’s rate spike is holding. The MBS selloff was triggered by the Fed indicating less rate stimulus—aka quantitative easing, or bond buying to keep rates low—could be a reality in the coming months.
Below is a good discussion Josh Brown and the CNBC FastMoney crew had with WSJ’s Fed reporter Jon Hilsenrath yesterday about the Fed’s rationale.
Also, here’s Hilsenrath today about mixed Fed messages keeping market guessing.
And here’s Josh on what a QE wind down might look like.