New York Fed President Bill Dudley gave an interview recently with CNBC in which he defended some of the most common criticisms of the Fed’s QE2 program.
Criticism #1: Quantitative Easing will cause inflation: Read the rest of this entry »
I’ve said it before, the Federal Reserve has been the most successful government entity in providing any substantial form of stimulus or relief to our economy since the downturn began.
The Fed strikes again
Unemployed? Underwater? Can’t refinance? If so, why not head to the D.C. area next week and voice your struggles and concerns to our people in power.
Beginning on Monday, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are hosting a two-day symposium regarding the future of the mortgage and housing markets. From October 25-26, professionals from the public, private and academic sectors will meet to discuss everything from loan mods to mortgage securitization.
Federal Reserve Chief Ben Bernanke will kick off the free event (which is open to the public), and FDIC Chairman Sheila Bair will be a keynote speaker: Read the rest of this entry »
After reading the title of this post you may be saying to yourself, “Why would I want rates to rise?” Don’t get us wrong, historically-low mortgage rates have been one of the only things keeping the housing market moving. However, these rock-bottom rates are also an indication of just how poor things are, economically speaking.
That said, mortgage rates trended downward once again last week: Read the rest of this entry »
This summer was quite an interesting time for mortgage rates. Mortgage rates fell a little more than one-third of a percentage point during the summer, seemingly reaching all-new lows every week. Yet as summer has begun to wind down, so have the declines.
For the last six weeks or so, rates have wandered in a very narrow range and seem to be finding some consistency. According to our latest Market Trends Newsletter, “Provided the economy gets no worse, and there is no return of financial panic, mortgage rates don’t really have much place to go.”
Last week the Federal Open Market Committee (FOMC) announced that they “will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.”
While that sounds like a technical mouthful, in essence it simply means that the Fed will re-continue a program that’s aimed at keeping long-term interest rates (e.g. 30-year mortgages, 10-year Treasuries) low for an extended period.
After the conclusion of the Federal Open Market Committee’s (FOMC) one-day meeting on Tuesday, the Fed announced measures that will help serve to keep mortgage rates low if need be:
To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.
When we write our Two Month Forecast for Mortgage Rates, we examine the existing factors as well as the pending changes in the markets that will potentially influence the direction of mortgage rates in the near future.
For the last 17 months or so, the Federal Reserve has been the main force behind keeping Conforming mortgage rates at near-historical lows. The Fed’s exit from the marketplace has provided ample fodder on this blog as we strive to anticipate just how their exit will impact the direction of mortgage rates, and who, if anyone will pick up where they left off.
A lot has changed since December 2009 when we wrote both our last two-month forecast and our 2010 Outlook for mortgage rates. We decided to delay the release of the February two-month forecast in order to give us some more time to consider the changes that were and still are forming in the mortgage market. Although delayed, we have published the latest Two-Month Forecast for Mortgage Rates.
At the dawn of the new year, the Fed was slated to move forward with their plan to end their mortgage-backed security (MBS) purchase program on March 31, 2010 — a plan that for nearly 16 months drove mortgage rates down to record lows. At that time, there was no other plan in place to pick up where the Fed’s plan would leave off. However, a lot has changed in three months.
While it may seem like the Fed’s decision to raise the Discount Rate by a quarter percentage point (0.25%) came out of nowhere, the Central Bank had been planning the move for weeks. Regardless of when the decision was made, mortgage rates nudged higher after the information was released:
The overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI rose by five basis points (.05%), ending HSH.com’s survey week at 5.41%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. The FRMI’s Hybrid 5/1 ARM counterpart moved a lone tick higher (.01%), during the latest survey cycle, landing at 4.58%. The all-important 30-year conforming fixed rate ticked just two basis points higher for the week. Read the rest of this entry »
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
