Big day in the making as we prepare for 23 billion in 10 year notes (auction at 12:05 pm cst) and any interest rate change (fat chance) and/or policy statement change (good change/ results at 1:15 pm cst).  We opened on the positive side (lower yields) as stocks began the day unchanged.  Within a hour, stocks jumped 100 points on the heels of sector strength in financials and home builders.  Currently, the Dow is up 122 points.  Mortgage backs, which were plus 4/32’s at one time, have turned tail and are currently off 4/32’s.  Since the beginning of the week, we’ve been scratching our heads as to why the market has rallied into supply (treasury auctions).  Seems it had more to do with soft stocks than anything.  As reality sets in, the question becomes do you sell the 10 year auction in front of the FOMC, knowing that there is at least a 50/50 chance that their view will be to wind down treasury purchases.  Or do you buy the auction based on the probability that the Fed stands pat, not wanting to rock the boat given the fragile nature of the economy.  Pulling back on treasury purchases makes sense from a deficient perspective but would take stocks lower and bond yields higher in its wake.  Austin mortgage pricing would suffer but how much would depend on whether or not a policy change was make towards MBS purchases.  Overall, we expect little change from the FOMC but must warn you that starting at high noon today (cst), it could get fast and furious.