Rate Update April 29, 2008

Mortgage-backed bonds are trading modestly higher this morning pushing 30 year rates slightly lower. Watch today’s you tube video to understand what we’ll be listening for in tomorrow’s Fed announcement.

From a technical standpoint mortgage-backed bonds are trading against a ceiling of resistance. This means that all else being equal we’d expect prices to fall (pushing rates higher in the next couple days). A strong Fed statement indicating that they feel inflation pressures will curb in the coming months could help us break this resistance pushing rates lower.

Current Outlook: neutral with locking bias