(interoffice email)

> The Fed through it’s SOMA account injected reserves in the
> market through a repo operation that included only AGCY
> MBS. 8bb for 43 days (1/10/08).
>
> This should help to keep the spread between GC Tsy and
> AGCY MBS GC from widening much further. MBS recently
> traded as high as 6% over the turn while treasuries are trading
> in the low3’s..

Thanks, Pat – should make a difference. Also, they did trade, which is pretty much all the fed wants – risk getting repriced and markets functioning.

♥