Another Hawkish Powell Press Conference Harshes Bonds' Mellow
Wed, Oct 29 2025, 3:12 PM
MBS Recap
Another Hawkish Powell Press Conference Harshes Bonds' Mellow
MBS Recap Matthew Graham | 3:11 PM
Another Hawkish Powell Press Conference Harshes Bonds' Mellow
The Fed cut rates and ended QT. Neither were surprises for markets and neither had an impact. The press conference was hawkish, however, with Powell saying a December cut was far from a foregone conclusion. This is very much counter to the market's expectation that a December cut was a lock. Fed Funds Futures tanked and yields surged about 8bps in the 10yr. MBS lost about 3/8ths and negative reprices continue to roll in.
modestly weaker overnight and holding steady so far. MBS down 1 tick (.03) and 10yr up 1.6bps at 3.992
01:28 PM
10yr yields are up 2.9bps at 4.005 and MBS down 3 ticks (.09)
01:41 PM
MBS now down 5 ticks (.16) and 10yr up 3.5bps at 4.012
Lock / Float Considerations
The negative reaction to the Fed press conference runs some risk of follow-through on Thursday. Risk averse clients are already locked. Risk-tolerant clients may be seeing their sign to lock in today's developments. We won't be comfortable saying that risk/reward is back to a balanced level until we see that this afternoon's negative momentum fails to follow through in the 2nd half of the week.
