Although daily volatility was high this week, mortgage rates ended the week nearly unchanged. A steady stream of economic news was roughly neutral for mortgage rates, as stronger than expected economic data was offset by solid demand for the week's Treasury auctions. During the week, a series of Fed officials shared differing viewpoints on the possibility of additional Fed purchases of Treasury securities. While the officials are divided about both the need and the effectiveness of buying bonds to stimulate the economy, the majority view appears to be that the Fed should undertake this action unless the pace of the economic recovery improves soon. A flexible program to purchase smaller quantities of Treasury securities has emerged as an appealing middle ground for Fed officials. Overall, a new Treasury purchase program would be favorable for mortgage rates. Increased Fed demand for Treasury securities would also increase demand for similar investments including mortgage-backed securities (MBS), which would push mortgage rates lower. Investors have already priced in the likelihood that more purchases will take place. There may be a downside, though. In contrast to the recent MBS purchase program, which involved a relatively steady, well defined level of weekly buying, the new program may be geared to allow the Fed to adjust its purchases based on changing economic conditions. By its nature, a program that is more flexible will be less predictable. The uncertainty will likely lead to increased volatility for mortgage rates, as investors amplify their reaction to each piece of economic news.