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Mortgage securities stare down end of QE3 as rally persists

Market defies forecasts for slump tied to wind-down of Fed's stimulus programme

Yields on benchmark Fannie Mae notes have shrunk 0.14 percentage point this year relative to government debt, narrowing to within 1.09 percentage points of an average of five and 10-year Treasury rates.

New York

THE end of the Federal Reserve's third round of bond purchases is proving to be a non-event for mortgage-backed debt.

That's partly because even though the US central bank won't be adding more home-loan securities to its balance sheet, policymakers will still be buying