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MBS SPECIAL ALERT: Bernanke Confirms Stabled Stallion |
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Posted To: MBS Commentary On June 5th, before the most recent ADP report, and with an eye toward NFP on the upcoming Friday, I laid out the reasons that we should not expect the Fed to care about the mortgage environment in the wake of taper talk, saying that Bernanke isn't likely to ride to the rescue on his MBS Stallion. Here's the post , but I'll break out the relevant points below as well, beginning with the example of the logical but faulty thinking and some highlights added for emphasis: "MBS markets are bleeding on the sidewalk, remember? Won't that cripple the fledgling recovery? The Fed has ridden to the rescue of MBS before and they'll do it again by golly!" This line of thinking is, in fact, quite logical; the questions, fair. But there's a huge immediate problem with it: the Fed doesn't have a history of...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it. |
