Fed Action...what does it mean?

NEW -> Contingent Buyer Assistance Program
I

Irvinecommuter

New member
The Fed said it will buy $40 billion of mortgages per month in an attempt to foster a nascent recovery in the real estate market. The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.
Click to expand...
http://finance.yahoo.com/news/fed-pulls-trigger-buy-mortgages-163638925.html

IMO...this will have a much greater impact to the mortgage rates than the buying of bonds or longterm investments.  Maybe we don't have to rush into buying after all...looks like the rates will stay down for awhile.
 
It's the new normal. Once you get past the bloviating from CNBC and their ilk, the Fed is just going to continue soldiering on with what they've been doing for months now. Where the Fed's actions won't help is with Congress raising Fannie/Freddie Guarantee Fees (Google what I'm speaking about. It's a very complex issue and would take up all of my monthly allotted pixels to write up about it here at TI) Assuming that the Fed keeps base rates in the mid 3's, the hike in G-Fees enacted by Congress will still push the price of these loans up by .50, or roughly .125% in rate.

One hand gives, the other taketh away.

Soylent Green Is People.
 
The Federal Reserve announced its highly-anticipated quantitative easing, or its so-called QE3, purchasing additional agency mortgage-backed securities at a pace of $40 billion per month in another effort to stimulate the struggling economy.
The Fed want to lower near-zero interest rates, citing an "elevated" unemployment rate and "strains in global financial markets."
Click to expand...

The committee also said it will extend the average maturity of its holdings of securities it announced in June through the end of the year.

In its statement, the Federal Reserve said it would keep the federal funds rate at zero to 1/4 percent at least through mid-2015.
Click to expand...
http://gma.yahoo.com/federal-expect...-mid-2015-141355567--abc-news-topstories.html
 
You must log in or register to reply here.
Back
Top