From the category archives:

The Fed

What This Weeks Fed Meeting Means for Mortgage Rates

by Alex Stenback 09.22.2009

It’s a virtual certainty that the Fed will not monkey with short term rates at the conclusion of this weeks meeting.  But don’t be fooled.  Just because they aren’t going to alter the Federal Funds rate does not mean that mortgage rates won’t be effected. That’s because the Fed will also issue a policy statement.  [...]

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Fed Decision Sends Mortgage Rates Tumbling. Will it last?

by Alex Stenback 03.18.2009

The Federal Open Market Committee voted today to keep the Federal Funds rate at 0-.25% – no surprise in that really.  It was widely expected. The Fed did surprise the markets by announcing they will ratchet up their purchases of mortgage-backed securities and start to purchase long term US Treasury Securities. To wit: “To provide greater support to mortgage lending [...]

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CNBC In Which Bill Gross Predicts 4.5% Mortgage Rates

by Alex Stenback 02.09.2009

Link to the video above here. Bill Gross, half-honcho at PIMCO, the worlds largest bond fund, says: “I think at some point we’re going to see a 4.5 percent mortgage rate and the 10-year Treasury rate capped at some level,” he said. “When the Fed comes in to buy Treasurys that will be a big day.” [...]

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The Problem with Manipulating Mortgage Rates

by Alex Stenback 02.06.2009

…is that it might not work all that well and screw other things up in the process. For instance, despite the Fed having spent some $90 Billion dollars (of $500 Billion set aside – 5 months to go!) in efforts to push mortgage rates lower, they’ve drifted off near term lows, and are sitting in [...]

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Fed Underwater on Mortgage Bond Puchases?

by Alex Stenback 01.30.2009

Interesting morsel from John Jansen at Across the Curve: The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts. They have bought big chunks of FNMA 4s between 100 and 101. Those bonds currently trade around 99. This would indicate a paper loss of something like 3 Billion.  [...]

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Fed Statement and Policy Decision: We Will Cram Money Down this Thing Until it Bleeds

by Alex Stenback 01.28.2009

Here’s the short version of today’s policy statement: The Fed has painted a very bleak picture of the economy, and though there is an outside chance that things improve later this year, things may well get uglier.  They’ll pull out all the stops to make it better etc. etc. etc. · Read the full policy statement here [federalreserve.gov] This [...]

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Back in Action

by Alex Stenback 01.06.2009

Okay, the holiday’s are over, and it is time to get back to work.  Regular blogging will resume in short order, but it’s worth pointing out that, as announced back in November the Fed has started to purchase mortgage backed securities in an attempt force mortgage rates lower. And it is working. As I write this, [...]

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The Aftermath: Fed Decision and Policy Announcement

by Alex Stenback 12.17.2008

Yesterday, about the time the Fed was announcing the latest shot of monetary policy cortisone for the financial system, we were laying prone getting an actual cortisone shot.  To the spine.  With a needle about as long as the sentence you are reading.  Really a fun experience.  We can’t recommend herniated discs, and the attendant treatment [...]

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The Fed Acts to Push Mortgage Rates Lower

by Alex Stenback 11.25.2008

In it's first action to directly influence mortgage rates and the housing market, the Federal Reserve has announced that they "will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)–Fannie Mae, Freddie Mac, and the Federal Home Loan Banks–and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae." There's [...]

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