Mortgage Market Commentary

Mortgage backed securities (MBS) prices fell (rates higher) before the first of three Treasury auctions this week that will raise $63 billion as concern over unprecedented levels of U.S. borrowing and rising stocks reduced demand for the relative safety of fixed income assets.

Investors fear the steps to stem the slump in growth and unclog the credit markets will bust the budget, leading to higher inflation. No economic data is scheduled for release today. Bernanke urges a sweeping overhaul of financial regulations in an effort to smooth out the boom and bust cycles in financial markets. The DOW is up 250 points this morning, apparently approving of Bernanke's comments. FYI, 3 month Libor rate is 1.33%, the highest level in two months. Treasury auction results at 10 am pt.