Yields relative to government notes on Fannie Mae, Freddie Mac, and the Government National Mortgage Association mortgage-backed securities tumbled Tuesday to the lowest since October 2007 after the Federal Reserve Board began a $500 billion program to buy the bonds.

The difference between yields on Fannie's current-coupon 30-year fixed-rate mortgage bonds and 10-year Treasuries had tightened by about 24 basis points, to 133 basis points, as of 10:20 a.m. in New York.

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