Mortgage Bonds are trading a bit higher so far today, as the New York State Empire manufacturing index came in with little surprise, given the current economic environment. By and large, the markets are awaiting the Fed's Interest Decision and Policy Statement tomorrow. The current Fed Finds rate stands at 1%, but there is a good chance the Fed will cut the rate by .50% or even .75% tomorrow.
In other news, Bernie Madoff's Ponzi scheme may eventually impact Mortgage Bonds. Essentially, a Ponzi scheme is a fraudulent investment that pays abnormally high returns out of new money being added by new investors, rather than from appreciation of the assets. Funds that invested in Madoff and lost all their money will now need to raise capital--which may lead to these funds selling Mortgage Bonds.
For now, I recommend floating. But be mindful that rates are near a 50-year low and there are a lot of things happening that could impact the market in the near term. So I may change to a locking stance soon, depending on how the markets move.
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