Prices of Mortgage Backed Securities (MBSs) opened at the same level as yesterday's close. MBS moved into positive territory this afternoon after Republicans had a meeting with President Obama.
The Feds begin their two-day Federal Open Market Committee (FOMC) meeting today to determine what steps they should now take in monetary policy. The Feds will be determining their next moves to get the economy out of the recession and to grow again.
In a meeting with House Republicans, President Obama indicated that he wants a bipartisan effort to pass a stimulus package to create more jobs. Obama also indicated a plan must be put in place for the Feds to buy up toxic mortgages from the banks.
On the news, the 30-Year FNMA 4.5% MBS coupon prices moved higher, and is now up 9/32 from yesterday's close. Remember, on MBS, as the price goes up, the yield goes down - and mortgage interest rates go down with it. Conversely, as the price goes down, the yield goes up - and so do mortgage interest rates. I expect mortgage rates may improve this afternoon.
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Lew Corcoran, ASP®, IAHSP, IAHSP-CB