Federal Reserve President suggested the Fed may not need to spend the full amount it pledged $1.25 trillion

By
Mortgage and Lending with GITER DONE MTG

 

My father used to say, "It's OK to kiss a nun, but don't get into the habit." Speaking of habits, the bond market has become accustomed to the Fed buying mortgages. What if they stopped? Federal Reserve President Lacker suggested the Fed might not need to spend the full amount it pledged ($1.25 trillion, for folks keeping score at home) to buy mortgages. So when someone like that suggests ceasing the program, it probably means a) the economy is seeing enough of a rebound that rates may move higher, or b) the demand for mortgages (artificial, yes, but demand nonetheless) will be lower, pushing prices lower and rates higher. So prices indeed did move down after his comments.

 

surfdana@sbcglobal.net

775 331-3001

Comments (1)

Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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Nov 08, 2017 06:29 PM