The Federal Open Market Committee (FOMC) announced yesterday it would slow the pace of its plan to purchase $1.25 trillion in MBS, and extend the program through the end of 1Q10. The FOMC is doing this to, "promote a smooth transition in markets."

Barclays Capital analysts reported late yesterday that they continue to favor being long the basis over the near-term as they believe the Fed will reduce its pace marginally.

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