useconomy: The Fed just announced a monthly increase in Mortgage Backed purchases - 12/12/12 11:52 PM
The Fed had already pledged to go into the marketplace and purchase $40 Billion in mortgage backed securities.Today that has been increased to $85 Billion per month (over $1 Trillion per year). Furthermore, it was announced that number would basically go up to unlimited until the unemployment rate declines befow 6.5%....quite a drop.
Currently the "inflationary expectations" are extremely low.  Not the actual inflation rate but what the public thinks that it will be.  The Fed said that if these inflationary expectations rise to 2.5% they would slow down (artifically stoking the mortgage market).  Whenever the Fed slows down on pumping … (3 comments)