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Bond curve flattens as 2-year yields keep falling

Mortgage-backed securities are up slightly, and 30-year activity is muted while 2-year yields continue to drop, easing some of the day’s earlier rate-stress.

Reported · Written up by our desk · Economy

Mortgage News Daily reports that bond markets are avoiding a worse spiral tied to debate over the bond market’s role in effectively tightening policy, a theme linked to comments made in yesterday’s press conference.

The outlet says the prior session saw the rate curve tighten, with the 2-year yield lower and the 10-year to 30-year area much higher, but this morning that pattern is playing out mainly in curve trading.

While 30-year bonds are flat, 2-year yields continue dropping, and economic data is not driving much additional reaction in trading volume or volatility.

Mortgage News Daily adds that mortgage-backed securities are up just over an eighth, the 10-year yield is down 2 basis points, and while rates remain near long-term highs, they are not breaking those levels.

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