Market Update (2/22/2010)

Is the end near? Mortgage bonds took a beating last week driving rates a little higher. We are still seeing exceptional rates, but we are also seeing higher rates than we did just 10 days ago. We have been here before, but we are now so close to the end of the Fed’s mortgage backed security purchase program that any move higher strikes fears that rates will continue on an upward trend. We are also continuing to see huge supplies of government auctions that is adding competition to mortgage bonds and leading to more concern over inflation.