Mortgage backed securities (MBS) prices are little changed after the government said it plans to sell a record $71 billion in long-term debt next week and before the Treasury Dept. will sell a record $26 billion of 7yr notes today. The administration needs to finance its unprecedented fiscal stimulus and financial rescue programs.

Since October 1st, the budget deficit has reached $956.8 billion with projections for it to reach $1.8 trillion.

Mortgage rates have been falling, down to 4.62% from 4.73%, but according to Mortgage Bankers Association weekly survey, purchase applications fell 1% and refinances dropped 22%.

First quarter GDP contracted more than expected, plunging 6.1% after a drop of 6.3% for 4th quarter 2008, capping the weakest six months in 50 years.

The recession persisted even as lower gasoline prices and larger tax refunds helped consumer spending but a record slump in inventories and further declines in housing were too much to overcome.

The Fed Open Market Committee (FOMC) concludes a two-day meeting with an announcement at 11.15am pt; investors will be closely watching as the last Fed announcement on March 18th produced a huge reaction in the MBS markets.