Today's economic data had little impact. November Pending Home Sales fell -4% to 82.3, below the consensus of 88.0, to a record low. December ISM Services came in a little higher than expected, while December Factory Orders fell short. The FOMC Minutes from the December 16 Fed meeting showed broad support for the rate cut to a 0.00% to 0.25% target rate and for the use of unconventional tools. Fed officials were concerned about the risk that the economic slowdown will last longer than expected.
Surprisingly, though, with MBS prices remaining near the highs for the day, some investors issued unfavorable repricing this afternoon. This was most likely due to capacity constraints. MBS markets gained for a second day following the Fed's announcement about MBS purchases, while Treasuries were mostly lower. The Dow gained 60 points. No economic data will be released tomorrow.
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