Mortgage rates have created new all-time lows this morning.
In their monetary policy statement yesterday the Fed, as expected, outlined a plan being called “operation twist” in which they will sell $400 billion in short duration Treasury notes and reinvest the proceeds into longer duration Treasury notes and bonds. 
What was unexpected though was that they announced they will reinvest the proceeds from prepayments on their mortgage-backed bond (MBS) holdings back into new MBS’s. Previously it had been assumed that this money would get reinvested into Treasuries. This development is what caused MBS prices to rally pushing down mortgage rates.
Also helping mortgage rates achieve new all-time lows is a global “flight-to-quality”. Stock markets here in the US and in Europe are down sharply today as investors shed risk in exchange for “safety” in this climate of uncertainty.
For now we’ll float but we need to be cautious. I expect a significant amount of volatility in this market.
Current Outlook: floating