Reading the Wells Fargo Securities report for February 5th, I quote; “For us, the trends are clear.  Economic growth will continue, inflation will rise and the Federal Reserve, at some point, will begin to withdraw liquidity from the capital markets…This week President Dudley of the New York Fed mentioned that the Fed may reinsert itself back into the mortgage backed securities market if interest rates were to rise quickly enough to upset the improving economy.  To us this is a signal that current market rates are not true open market rates and are in fact heavily influenced by government intervention that could create more upside inflation/rate risk in time.”

Source:  Wells Fargo Securities, LLC