Some agency MBS speeds seen slowing in the most recent prepayment reports may be bottoming out and could inch up slightly next time around.

"We think this is probably the bottom, near term at least" for certain MBS, said Art Frank, director and head of MBSresearch at Deutsche Bank Securities, New York. He said lower 4.5% and 5% MBS coupons might not change but speeds for 5.5% and 6% coupons might be "marginally faster," while speeds for higher coupons could be tougher to predict due to the impact of federal programs.

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