Intermediate and long Treasury yields continued to move lower as the stock markets took a decided turn downward.  After absorbing the Fed's Tuesday announcement, investors concluded that the economy is weaker than they though earlier in the summer, resulting in about a 2.5% decline in the major indices.  Gains were limited to 7-year and longer paper, however, as the 2-year closed roughly unchanged and the 5-year only rallied by a basis point.

Treasuries were little changed on Monday, as the market marked time waiting for today's Fed announcement.  MBS were mixed, with lower coupons outperforming.  Despite the Treasury's official denial that a major refi initiative was in the works, the hubub instigated by the proposal to create a streamlined refi program (which morphed into massive debt forgiveness) reminded investors that they have significant exposure to "event risk" at current dollar prices.  Dollar rolls cooled down a bit; the Sep/Oct Fannie 4 roll has lost a tick or two over the last few sessions, although it's still rolling about 2 ticks special.