Surprise surprise! The range is still the range for bond markets and mortgage rates. Yesterday’s tough talk from Fed Presidents Dudley and Lockhart proved to be individual opinions amid a broader, softer stance from the whole of the Fed.
Bond markets were essentially unchanged heading into the FOMC Minutes and improved slightly afterward. There was no major economic data this morning, with most of the overnight and early morning cues coming from European bond markets and pre-Fed positioning.
In the bigger picture, today did nothing to challenge the recent range, and did very little to add to our sense of what the Fed might do in the next two meetings. We did get at least a tidbit of info when 10yr yields bounced at almost exactly the same ceiling level as yesterday (1.588 vs 1.587). This gives us something to watch and freak out about if it’s broken. For now, we’re heading out the door closer to 1.56.