As we discussed on Friday, markets continue to take a defensive stance against the prospect of the Fed reducing the pace of their asset purchases.  As investors withdraw from bond markets, the prices of mortgage-backed-securities (MBS) fall, forcing lenders to offer higher rates.  The combination of the Fed asset-buying speculation, seasonal absences among market participants, and debate over the next Fed Chair nomination is creating a very uncertain environment where traders are more apt to trade according the momentum.  One analogy is that it's easier to go with the flow of the current than to swim against it .Mortgage interest rates were convincingly higher today, continuing last week's move toward the levels not seen in over two years.  Those levels were reached by some lenders today as they rose above July 5th's highs, while others aren't quite there yet.