Bond Volatility Spikes Ahead of Fed

Mortgage markets experienced a surge in volatility last week, sending rates swinging sharply and leaving both stocks and bonds under pressure. In this episode of Master the Markets, host and expert Bill Bodnar explains how a spike in the MOVE Index — the bond market’s key volatility gauge — reached its highest level since June, helping drive the swift rise in rates.
Oil prices, geopolitical developments, and global uncertainty all added fuel to the volatility. Yet by the end of the week, a potential technical pattern began to emerge suggesting that the recent selloff in bonds may be getting overextended. That’s why Bill urges mortgage professionals to watch market levels closely in the days ahead.
The focus now shifts to the Federal Reserve, but markets may already be looking past Chair Jerome Powell and toward the possibility of a future Kevin Warsh led Fed. If policy expectations shift in that direction, it could reshape how investors price rates and monetary policy going forward.