The mortgage-backed securities market was hit by a triple whammy this week, market sources say, as it absorbed the effects of the Federal Reserve's quarter percentage point interest rate increase, the effects of end-of-quarter bookkeeping and a pre-July 4th malaise.

"The sales force is kind of watching the paint dry," said one MBS trader mid-week. "The occasional trade gets done, but there is not a lot of retail volume."

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