Rates were little changed Tuesday as investors await tomorrow’s FOMC meeting of the Fed. In economic news, August Housing Starts declined 5%, slightly more than forecast. Building Permits, a leading indicator, rose 3%, better than expected. Yesterday, Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA) which oversees Fannie Mae and Freddie Mac, announced that the two agencies will likely raise guarantee fees in 2012 through “a series of periodic, gradual price increases”. The move is designed to reduce long-term exposure to credit risk by taxpayers, but comes at a time when the Obama Administration is attempting to encourage more borrowers to take advantage of low mortgage rates. Separately, some investors are expecting the Fed to announce “Operation Twist” following tomorrow’s FOMC meeting. If enacted, the Fed would re-allocate a portion of its $1.65 trillion U.S. Treasury portfolio to increase long-term bond holdings and reduce short-term holdings in an effort to push long-term rates lower. Analysts are divided on the likely effectiveness of such a move. No other key data will be released today.