QE3 doubt leads to highest mortgage bonds since September

Yields on mortgage securities that guide U.S. home-loan rates jumped to the highest in almost four months as the minutes of a Federal Reserve meeting signaled the central bank’s bond buying may end this year.

A Bloomberg index of yields on Fannie Mae-guaranteed mortgage bonds trading closest to face value rose 0.07 percentage point to 2.34 percent as of 3 p.m. in New York, the highest since Sept. 12. That was the day before the central bank announced plans to add $40 billion more of government-backed home-loan securities to its balance sheet each month.

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