Friday, September 19, 2008

MBS market swings back this afternoon

Looks like the Treasury may have already started implementing it's plan to double MBS purchases this month.

Around 3:30pm, someone (government?) came into the MBS market and went on a buying spree, BIG time. I can only assume that it's the Treasury or Fed, since this kind of move in prices in that short amount of time can only be achieved with serious purchase power. Of course, I could be wrong - it could be a very large institutional investor who's betting that prices will go up from here.

This morning we were down ~45bps (basis points). We are now up 112bps.

Banks have yet to issue rate changes, but we are, after all, late in the afternoon on a Friday (after an extremely volatile week). I expect we'll see better rates (1/8%) on Monday morning, if these prices hold.

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