MBS are down -15/32 (FNMA 30-yr 3.5 at 103.15), around 10/32 below morning levels, and near the low for the day. Unfavorable repricing took place. MBS moved lower early in the session, and comments from a Fed official caused them to decline more this afternoon. The Fed’s Lockhart said that he feels that the economy would have to perform significantly worse than expected to prevent the Fed from raising the federal funds rate in September. Investors increased their expectations for a September rate hike after the comments. The Dow is down 50 points. Tomorrow, ADP Employment Change, the Trade Balance, and ISM Services will be released. The key Employment report will come out on Friday.