1/28/10

Good morning. Most rate prices worsened today as mortgage bonds continue to lose ground after yesterday’s FOMC rate decision. Although the Fed decided to keep rates low for and extended period and offered no changes to the MBS program, Bonds did not take kindly to the text. Many blame the lone dissenter, Kansas City Fed President Hoenig, for not showing a united Fed determined to keep rates low. He is a known inflation hawk and his views should be no surprise, but markets will be markets. In news released today: Chicago Fed economic activity decreased in December while durable goods orders increased and jobless claims decreased. Overall not a bond friendly set of data. Today brings the last of this weeks Treasury auctions with 7-year notes being offered up. Yesterday’s 5-year went well. Let’s hope the same for the 7s today. Mortgage rates attempted a recovery earlier but are stubbornly staying negative widening a bit to Treasuries…