So far, we've seen none of the characteristic knee-jerk movements that often follow hotly-anticipated Fed announcements.  Bonds rallied more-or-less immediately, and haven't been interested in giving much of that rally back.  

To reiterate the previous update, the crux of today's bond market motivation is exactly where we expected it: in the Fed's economic projections.  Specifically, the median forecast didn't move higher in rate for 2017 or 2018, even though a few members upped their respective "dots."  

Financial markets were expecting that median Fed Funds rate expectation to increase at least a little bit.  In other words, markets were overly-prepared for the Fed's forecasts to accelerate the rate hike timeline, and we're treated to a corrective rally as a result.  

While the gains are most welcome today, this sort of motivation (corrective) doesn't have the same staying power that a "new development" type of motivation would have.  Markets are simply getting back in line with where they would have been without over-trading the rate hike forecast.  Once we reach that magic line, the rally will be out of motivation.  The stronger the gains, the closer the line becomes.  

Could that happen in as little as one day?  Maybe.  But if it does, there wouldn't be justification for bonds to move quickly back to this morning's levels.  That means if your lender isn't passing along more than half a point of gains this afternoon that there will be some margin for lock/float error heading into tomorrow.

10yr yields are currently down nearly 10bps at 2.506 and Fannie 3.5s are up 23/32nds at 101-19.