Mortgage loans in » mortgages rates http://mortgageloansin.com Tue, 29 Jun 2010 17:10:59 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Mortgage Rates Won’t Soar When Fed Ends Buying Spree http://mortgageloansin.com/mortgage-rates-wont-soar-when-fed-ends-buying-spree/ http://mortgageloansin.com/mortgage-rates-wont-soar-when-fed-ends-buying-spree/#comments Thu, 28 Jan 2010 23:04:06 +0000 Mortgage http://mortgageloansin.com/?p=214 Conventional wisdom states that mortgage rates shall increase once the Federal Reserve retreats from its unprecedented move into the market March 31st. However, if this were to be true – you’d think the market would be sniffing it out ahead of time and we’d already see a moderate increase. Instead, long term rates remain fixed near 5%. Aside from the bullish views below, some very smart people are speculating that the Christmas Eve massacre (Jan 5, 2010: WSJ – The Treasury Department’s Christmas Eve Masscare of the US Taxpayer) was an under the table way to hand off the responsibility of suppressing mortgages from the Federal Reserve to Fannie & Freddie. (aka FanFredron)

If the left hand or the right hand is buying mortgage backed securities (MBS), it really doesn’t matter. Further, if *everyone* believes that if rates jump “too high” (as judged by a small cadre of people, rather than the market) the Fed will come back to the rescue, it tends to self fulfill. Which in and of itself will help to surpress rates. Showing once again how “free markets” are nothing more than a cool bumper sticker in the US nowadays.

 

Via WSJ:

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