Mortgage backed securities (MBS) prices are higher (rates lower) in quiet range-bound trading as investors await todays Fed purchases of U.S. debt and the 11am pt release of the FOMC minutes from the monetary policy meeting in late April; FNMA 4.0% coupon 100.02bps, +7bps and the high of the session. Treasury Secretary Geithner is testifying this morning to the Senate Banking Committee on the progress of the Troubled Asset Relief Program (TARP) and the many other government rescue plans. The Treasury Department is scheduled to announce tomorrow the amount it will auction of 2, 5 & 7yr notes next week as the administration borrows record amounts to try to snap the deep recession and service record budget deficits. The FOMC minutes may address if policy makers will adjust the size of the central banks purchase program and help fill in details on quantitative easing. The minutes have become a market mover as analysts parse each word looking for clues to policy. The minutes include the complete economic analysis compiled by the Fed and whether any members voiced opposition; any surprises can cause a reaction in MBS prices. According to the Mortgage Bankers Association (MBA) weekly survey purchase applications are showing no strength at all, declining 4.4%. Falling home prices and low rates (4.69% avg 30yr fixed) are failing to stimulate significant buying. Refinancing activity continues to rise, up 4.5%, which will help limit future foreclosures. On the inflation front, oil rose above $61 a barrel for the first time in 6 months as U.S. crude supplies dropped. Oil is up 36% this year and could extend its rally if prices cross their 200 day moving average of $63.29 a barrel. The 200 day moving average is a key technical level for many momentum models and a break above would provide support.