Interest Rate Trampoline
A lot of you want to know what in the H-E- double hockey sticks is going on with interest rates. In a nutshell, financial reports come out every single morning (unemployment, consumer confidence, new home sales, Lana spending (this tracks how much my wife spends each day), etc. When these reports are good for the economy, they are bad for rates. When they are bad reports for the economy, rates go down. In the last week it seems that every report that comes out beats the estimate (in a positive way) that the economists had predicted. The Fed is trying to fight the improving market and keep interest rates low. To do this the Fed is going to buyback treasury and mortgage securities today, and purchase treasury notes on Thursday. This will (knock on wood) help bring rates back down, but I don’t know if this will bring them back down under 5% again. The effectiveness of the Fed’s buyback program has been with mixed results. It has helped keep rates low, but they are higher now than when the program began in March. And it’s only taken $480 billion to get here!
More on Rates
Here’s a well written article (and it even has a quote from Ken Perlmutter (the Prez of PERL Mortgage). Click HERE.
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