Market Update 5/1/2008

By
Mortgage and Lending with CYPRESS MORTGAGE

Treasuries rose, pushing yields to a one-week low, as initial jobless claims climbed

and income growth slowed, bolstering concern that the economy is losing momentum.

Investors also bought debt before a government report tomorrow that may show the

economy shed jobs for a fourth straight month. Traders added to bets today that the

Federal Reserve will lower interest rates for an eighth time since September, after

yesterday's quarter-point cut to 2 percent. The price of the 2 1/8 percent security due

in April 2010 rose 1/32, or 31 cents per $1,000 face amount, to 99 25/32. The 10-year

note yield fell 3 basis points to 3.70 percent. Jobless claims rose to 380,000 in the

past week from 345,000 the previous week, government data showed. Growth in

personal incomes slowed to 0.3 percent in March after a 0.5 percent increase the prior

month, the government said. Traders see a 28 percent chance the Fed will lower its

benchmark rate to 1.75 percent at its next scheduled meeting on June 25, futures on

the Chicago Board of Trade show. The rest of the bets are for the Fed to keep the rate

unchanged at 2 percent. The market is .125 to .25 better in discount this morning.

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