Prices of Mortgage Backed Securities (MBSs) prices spiked higher (yields and mortgage rates lower) at the opening bell this morning and continues the rally that started last yesterday afternoon. MBS prices rose on speculation the Fed will begin purchasing "toxic debts" from banks in yet another effort to cut long term interest rates. The plan is also expected to include fresh capital injections for the banks as well as a new homeowner aid program.
There is the potential for high volatililty in the markets today as Treasury Secretare Geithner unveils the revisions to the TARP program, as Bernanke testifies before Congress, and as the 3-Yearnote auction results could bring dramatic swings in MBS prices.
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Lew Corcoran |
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