Federal Reserve to Keep Rates Low

Posted by Jeff on March 18, 2010 under Mortgage Info | Be the First to Comment

Federal Reserve policymakers pledged to keep rates low for an “extended period”. This reiterates the phrase they’ve used for the past year. The Federal Reserve also said it would end, on schedule, its program of buying mortgage-backed bonds to help keep home loan rates low.

The big question is will the end of the Fed MBS buy back policy drive mortgage rates up due to the lower demand for the security. As the normal secondary market for mortgage bonds is virtually non existent, it remains to be seen what will happen to mortgage rates.