U.S. mortgage bond prices rise after Fed leaves purchases alone

September 18, 2013

NEW YORK, Sept 18 (Reuters) - U.S. agency mortgage bond prices rose on Wednesday after the Federal Reserve surprised traders when it decided not to pare its $85 billion monthly bond purchases, blaming the recent surge in mortgage rates and other borrowing costs as a risk to the economic recovery.

Prices on 30-year mortgage-backed securities with a 3.5-percent coupon and loans backed by Fannie Mae were last up 14/32 with a yield of 3.5096 percent, down 7.5 basis points from late on Tuesday.