MBS opened flat but later dropped by 25 bps, while stocks rose by 25 points. The Nonfarm Payrolls report surpassed expectations with 339k jobs added, but unemployment increased to 3.7%, and earnings fell short. The continuous job market strength may influence the Federal Reserve’s decision on a potential rate hike. Surprisingly, the bond market did not experience a significant sell-off despite the incongruent data. The ISM report indicated resolved supply chain issues and fading commodity price inflation. St. Louis Fed President James Bullard compared the current Fed Funds rate to the suggested rate using the Taylor Rule. The stock market saw a relentless rally, driven by big tech, options positioning, and expectations of a Fed pause. MBS ended down by 34 bps, 10-year Treasury yields increased by 10 bps, and stocks gained 61 points. Signature and Silicon Valley Bank portfolio liquidations are progressing, but some specified sectors face challenges. The Federal Reserve and banks’ selling of Agency MBS remains a concern for mortgages.