Posted To: MBS Commentary
2014 was a decisively flatter year for the Treasury yield curve. That means that longer-term (7, 10, 30yr) rates were constantly moving lower relative to shorter term rates. This wasn’t simply a factor of longer-term rates moving lower. Indeed, they weren’t always moving lower in 2014, but on the occasions where rates rose, the shorter-term rates (2-3yr) tended to be rising faster. Considering the long term outlook for economic output and inflation combined with the prospect for a Fed rate hike, it makes sense for those shorter term yields to suffer while longer-term debt remains less phased. It also makes sense to see a bit more support for the short end of the curve heading into the end of the year (i.e. 2yr Treasuries were more resilient vs 10yr Treasuries since Dec 17th). It’s…(read more)
Via:: MBS RECAP: As Life Returns to Markets; 2014’s Themes Continue
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