Mortgage backed securities (MBS) prices are higher again this morning in quiet trading (rates lower) as the Fed readied its 7th purchase of government debt in its effort to reduce borrowing costs and the Treasury prepared to sell a record $35 billion of 3yr notes to support the administration's monumental stimulus proposals.

The stock market is higher on speculation life insurers will be bailed out next by the government. Mortgage Bankers Association weekly application data shows purchases were up 11% and refinances up 3%, with refi's making up 78% of all new loans. U.S. apartment rents fell 1.1% & vacancy rates rose to 7% as job losses and falling incomes reduced demand, shrinking the pool of potential renters and bucking expectations that apartments would benefit from slumping home sales. 30yr mortgage rates fell to a record low of 4.78% last week, but are still 189bps above the 10yr note and widening from 142bps two years ago. FOMC minutes from March 18th Fed meeting will be released at 11am pt and has been highly anticipated by traders. No other economic reports are due.