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For week's now, the financial markets have been gearing up for the Federal Reserves withdrawal from the Mortgage Backed Securities (MBS) market by purchasing MBS's to keep rates lower. Many have speculated either way as to how this will take the direction of mortgage rates in the future.
With all the " Hoopla " over the last few weeks, a vast majority are now inclined to think that the Fed's move will not drastically rates as much as anticipated. Rates will likely again be closer tied to Treasury Bill prices, specifically 10Yr Bonds, which is what controlled rates in the past to a large degree.
While I profess not to be a complete expert in this area, I try to stay abreast of what and how it effects the market since I am a lender. It is key for me to keep my pulse on rates so that I can educate borrowers and Realtors alike regarding mortgage trends.
Two articles were posted today regarding this subject. One in Mortgage News Daily and the financial section of Aol. While the information can be somewhat technical, they are both good reads to bring yourself up to speed on what could effect the direction of the market.
The general mood of the market from what I read is that rates may not be effected as much as first anticipated. While no one has a crystal ball, most commentary has been on the positive side. Let's hope that is the case. Also remember, that in the last Fed Meeting, this subject was discussed with a comment by the Fed that they would keep as close eye on this, and how their exit effects the market. The Fed did not close the door on re-entering the market if things got out of hand.
Stay positive. To read the articles, click on the links below:
http://www.mortgagenewsdaily.com/mortgage_rates/blog/143544.aspx
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