US mortgage bond prices extend fall

NEW YORK, Oct 30 (Reuters): Prices on US 30-year agency mortgage-backed securities extended their earlier decline on Wednesday mid-afternoon after the Federal Reserve as expected decided to end its monthly purchases of MBS and Treasuries.
Prices on 30-year mortgage-backed securities that carry a 3-per cent coupon and are guaranteed by Fannie Mae fell to a session low of 99-25/32, down 11/32 from late on Tuesday.
The yield on the 30-year, 3-per cent Fannie Mae MBS issue was 3.02 per cent, up 4 basis points on the day.
In other areas of the bond market, Treasury Inflation-Protected Securities lagged regular Treasuries as the Fed acknowledged the recent decline in oil prices has clamped down on domestic inflation, although it still expects inflation to achieve its 2 per cent goal.
The inflation breakeven rate of yield gaps between TIPS and nominal government debt narrowed .