Mortgage interest rates increased this past week despite the Fed announcing last week that it would purchase $600 billion in Treasuries over the next several months. Markets are concerned that the Fed may purchase intermediate term 3 year, 5 year, and 7 year notes instead of longer dated 10 year notes and 30 year bonds which would be more likely to help mortgage rates. Markets are also concerned that the quantitative easing move is mainly directed toward weakening the Dollar in order to improve exports. Economic data of note included weekly jobless claims which dropped more than expected. The September Trade Deficit was less than expected on slightly stronger exports. The Treasury reported a budged deficit of $140.4 billion in October, the 35th consecutive month of deficit spending. Also, the Treasury auctioned $72 billion in 3 year notes, 10 year notes, and 30 year bonds. The auctions were met with mixed demand.
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