MBS Market Trend

       MBS bonds which had reacted badly to the “fiscal cliff” bill being passed, suffered further from the FED announcement.  Stocks too were affected.  When the minutes of the recent FED open market were released, stocks gave up their gains.  The minutes revealed that 50% of the voting market committee members believed that QE3 would not be in place for years.  Instead they thought it would end this year.  We know that Ben Bernanke is a staunch supporter of QE3 and that he will likely prevail.  The long term outlook for MBS bonds still favors floating.