Mortgage Rate Stability May Hinge on End of US Treasury Purchases of Mortgage Backed Securities
March 22nd, 2010 Categories: Mortgage Update
Our go to mortgage guy, Rob Clark, offers that mortgage rate stability may hinge on the end of a US Treasury program that purchased mortgage backed securities.
Rob goes on to say “According to some analysts, mortgage rates “wandered about aimlessly” last week. It is becoming apparent that the current economic recovery will be a very slow and muted affair, at least for the time being.
With manufacturing issues appearing to cool, consumers remaining on the sidelines, and, in last week’s Producer Price Index (PPI) and Consumer Price Index (CPU), inflationary pressures seeming to be nearly nonexistent, the Fed will likely be able to maintain its low rates for some time. The Fed’s policy statement last week said as much, with the Fed leaving rates unchanged again.
This week could be another week of the same for rates, but there are some unknowns coming. While many have pointed out that the Fed continues to have many tools available to influence rates, its campaign of buying mortgage-backed securities will come to an end on March 31st.
While there appears to be some significant stability to rates right now, markets can turn quickly. Hopefully it will not happen, but even a false rumor could lead to a spike in mortgage rates in the coming weeks.”
For Rob’s full report, click here.
Michael
; ?>/images/MatoChiclet.gif)
