Fannie Mae-No Politics (FNMA)

[Phisherman]

Mortgage-backed securities jump, signaling rates to drop
01/06 03:57 PM
SAN FRANCISCO (MarketWatch) -- Mortgage-backed securities rallied Tuesday, sending yields sharply lower, which indicates mortgage rates are likely to fall further. Yields on securities of pooled mortgages backed by Fannie Mae (FNM:$0.84,00$0.02,002.44%) fell 30 basis points Tuesday from Monday's close, following a 17 basis-point decline Monday, said Miller Tabak & Co. bond strategist Tony Crescenzi. These yields correlate strongly with Freddie Mac's (FRE:$0.86,00$0.04,004.88%) weekly survey of home loan rates. From an average 5.1% last week, the average mortgage rate "is probably moving toward 4.75% or lower," wrote Crescenzi in emailed comments. The tumble in MBS yields comes as the Federal Reserve has started buying up to $500 billion in MBS backed by Fannie Mae (FNM:$0.84,00$0.02,002.44%) , Freddie Mac (FRE:$0.86,00$0.04,004.88%) and Ginnie Mae.