Trading action in the mortgage market is light and choppy as investors tend to move to the sidelines on the last trading day of the quarter. That is probably a wise strategy - since there is really nothing driving the market today. The light offering of economic data released earlier (Chicago area Purchasing Managers Index and the March Consumer Confidence figures) fell roughly in range of expectations rendering them completely toothless with respect to their influence on the direction of mortgage interest rates.
The Fed announced they will not make any purchases in the Treasury market today but they expect to re-enter as a buyer tomorrow and Thursday. Some market participants were disappointed with The Fed's rather feeble buying appetite on Monday. The central bank only bought $2.5 billion in longer-dated Treasury obligations yesterday, compared with $7.5 billion on both Thursday and Friday of last week. In my judgment the Fed is clearly demonstrating their acute awareness that "all-day suckers" never really last that long - so it is important to stretch out the relative good times for as long as possible.
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