Posted To: MBS Commentary
As the attached video suggests, “red happens.” It really does! After all, if you were the puppet-master behind rate movement, and if you’d decided to make rates move lower for 35 years in a row, you wouldn’t just drop rates from 15+ percent in 1981 to 1.5 percent the next day and call it good. Well, maybe you would, but the point is that markets never go anywhere in a straight line except over time frames of milliseconds. There is always some push and pull. When markets are making a strong move in any given direction, the pushing and pulling is out of balance . We would call the smaller of the two movements the “correction” to the broader “trend.” In the current case, the short term trend is sideways, so the pushing and pulling are relatively balanced….(read more )