Modest, Incidental Victory

Bonds closed with MBS in line with their best levels of the day, up an eighth of a point. 10yr yields fell just under 1bp to 4.264. 2yr yields did better, shedding just over 4bps and extending their gap vs 10yr yields to the widest levels since the volatile days in early April. The AM news cycle credited the news of Trump firing the Fed's Lisa Cook for this "steepening" (a steeper slope between 2 and 10yr yields). Indeed, it may have contributed, but it's debatable whether this level of movement in the curve actually matters.  2s vs 10s have been holding a tight range since April with few days falling outside a range of 0.45 to 0.57. In the bigger picture, bonds are still counting the hours until next Friday's jobs report.