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Treasury yields swing after Fed Governor Williams downplays urgency

The 10-year yield briefly topped 5.29% before rebounding, while mortgage-backed securities fell at the open and then pared losses after the remarks.

Reported · Written up by our desk · Government Bonds

Treasury markets saw a sharp intraday reversal, with yields pressing to weaker levels early in the session despite a decline in oil prices, according to Mortgage News Daily.

Mortgage traders pointed to bearish momentum and quarter-end trading, and the 10-year yield crested at 5.29% at its weakest, aligned with a technical level from 2007.

The tone shifted after Fed Governor Williams said he did not see a need for urgency following the September rate hike, prompting a quick rally in Fed Funds futures and a return of much of the yield curve to positive territory by the close, excluding 30-year bonds.

By the end of the day, mortgage-backed securities were down about an eighth, with the 10-year yield up 1.1 basis points to around 5.25, though that followed a period of heavy selling between 9:30 a.m. and 10:00 a.m.

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