Vague Housing Plan Incites Doubt

February 23, 2009

Mortgage spreads firmed up on Wednesday as Treasurys sold off prompted by another round of supply worries. These market jitters resulted from the vague details of President Barack Obama's housing plan. Lower coupons were substantially tighter - even in the face of more than $2 billion in supply - while higher coupons were weaker because of the increased prepayment risks associated with the latest plan.

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