"Panic" is how a few reports summed up the markets yesterday. Despite the S&P downgrade on US debt, Treasuries remained the go to safe haven with 10-year notes surging almost 2 points and dropping the yield to 2.34%, its lowest level since January 2009. The Dow, on the other hand, plummeted over 600 points or 5.5%. Investors are becoming increasingly bearish about global growth and the prospects of another recession and the continuing uncertainty in the EU. MBS prices closed higher by roughly .75 and .5 on 30-year 3.5% and 4.0% coupons, although how much of this is passed through on rate sheets remains to be seen.
This is good for mortgage rates as they continue to slide to the lowest levels yet!