This week's activity was largely dictated by the Federal Open Market Committee (FOMC)statement released mid-day on Wednesday. The FOMC's statement effectively aligned the MBS stars: low rates, attractive carry and relative yield, along with increased odds of quantitative easing 3.

The two changes to the FOMC statement supporting this alignment were: (1) the Committee's decision that economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014"; and (2) additional language in its sentence referencing its securities holdings.

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