Yesterday, treasuries and mortgages rallied as the Fed remains prepared to act as needed to aid economic growth. Bernanke used the term, “unusually uncertain” to describe the economic outlook. Traditionally, the FOMC would cut rates but with the Fed Funds rate at or near zero, he outlined how they could lower the amount interest paid on bank reserves, pushing money back into the economy via banks. Mortgages are selling off this morning on better than expected home sales data (-9.9% was expected, -5.1% was actual).

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