Once More: What's Up With MBS Underperformance? The notion of MBS underperforming Treasuries is front and center today--not because that underperformance is especially large, but mainly because MBS were often in the red while Treasuries were in the green.  We have nothing new to add to yesterday's similar discussion of MBS underperformance but have nonetheless attempted to add a few thoughts in today's video. As for nuts and bolts, it was a boring day for bonds with modest gains for the long end of the yield curve (one major reason for MBS underperformance) and an uneventful, sideways grind in the afternoon.   Econ Data / EventsImport Prices-0.6 vs 0.0 f'cast, 0.6 prev Export Prices-0.4 vs 0.1 f'cast, 0.9 prev Consumer Sentiment65.6  vs 72.0 f'cast 69.1 prev 1yr inflation exp. unchanged  5yr inflation exp. +0.1% Market Movement Recap08:58 AM stronger overnight, but giving up some gains in the past half hour.  MBS up 1 tick (.03) and 10yr down 2.7bps at 4.218 11:54 AM Choppy trading in a narrow range.  MBS underperforming with 5.5s down 1 tick (.03).  10yr yields are down 3bps at 4.215 03:14 PM Zero change from the last update and very little volatility between now and then.