Interest rates end up slightly better

After the roller coaster ride ended last week, rates managed to end up slightly better than where they began. Although the week ahead is jam packed with high impact economic news, it's likely the big market mover this week will be other financial headlines. So what's the skinny with the GSEs (Freddie and Fannie) and just how will it impact rates?

Last week, almost all the positive rate movement earlier in the week was nearly erased as continued speculation as to the financial health of Freddie and Fannie was brought into question. Investors wrestled with the idea that the two mortgage giants that collateralized over $5 trillion in mortgage debt may become insolvent and require a government bail out. Considering that the national debt is less than double the total amount Freddie and Fannie are on the hook for, speculation that even the Federal Government might have trouble raising the necessary capital weighed heavy on investors minds.

Over the weekend, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke outlined a plan to bail out Freddie and Fannie if necessary. Although the plan would require congressional approval. It remains to be seen if investors will feel comforted by the plan.

To make matters even more volatile, the week ahead is jam packed with high impact economic reports that will indicate whether inflation is still a concern. Add to that the Fed's FOMC meeting minutes being released and we have what might be the most volatile week in recent history.

The bottom line: Expect the market to be extremely volatile