Market Analysis

The spread between US Treasury notes and mortgage-backed securities (MBS) issued by Fannie Mae and Freddie Mac is widening as investors are hoping for an announcement by Federal Reserve Chair Bernanke that the Fed will begin focusing its bond purchases on longer term bonds rather than on a mix of short term and long term bonds (the Fed is buying bonds as MBS it previously purchased are redeemed through regular payments or payoffs).

In economic news, Initial Jobless Claims for the week ended 9/3 came in at 414,000 which was higher than the 400,000 expected.  President Obama will be making a speech tonight focused on jobs.  Investors do not appear to be expecting dramatic announcements tonight.