Market Today

Mortgage Bonds have continued to improve today by increasing up 47bp. Remember, when mortgage bonds increase rates decrease. Today was also one of those rare days when stocks finished higher as well, and we also saw the ongoing disconnect between the 10-yr Note and mortgage bonds continue as the 10-yr went into the red dropping 34bp. With not a lot of economic reports released today this reduction in interest rates is due to the government’s buying program for mortgage backed securities while the stock market benefited from news that a deal was struck between congressional leaders and the Bush Administration to offer the Big 3 automakers up to a $15 Billion bridge loan package in an effort to keep them out of bankruptcy. Rates are very low now and are dropping, now near best levels in 3 years. So if you are looking to purchase or refinance, get your loan together now.