Operation Twist

WeeklyBasis 10/9: Thanks For The Low Rates Europe

Rates rose .25% last week as mortgage bonds sold 4 of 5 days on (weak but) better than expected economic data. Rates rise when bonds sell, and rates have now risen to lose the entire dip that came after the Fed’s September 21 commitment to keep rates low. This rate rise comes as headlines scream

WeeklyBasis 10/1: How To Shop For A Mortgage

Rates held under 4% again last week. The link shows how rates closed Friday in the three mortgage price tiers: loans to $417k, to $625k, and to $2m. But rates change in real time. Example: they rose and fell .25% last week as Eurozone optimism did the same and U.S. home prices, jobless claims, and

TABLE: All Forms Of Fed Lending

Since 2008, I’ve tracked the Fed’s quantitative easing closely because it directly impacts rate markets and my client advice daily. Today I got an inquiry from a student trying to fact check QE dates for a term paper. I gave her the dates and link below (to a timeline and rate chart), and she asked

FAQ on Fed’s Latest Mortgage Bond Buying Program

Remember QE1 from January 2009 through March 2010? The Fed bought $1.25 trillion in mortgage bonds during that time. So now they collect money when loans payoff on refis and also when borrowers make their payments. And last week the Fed said they’d use this money to buy more mortgage bonds starting October 3. This

Fed Tries Feng Shui on Yield Curve

The myth that the Fed still had lot of tools to deploy to help an ailing economy suffered a setback this week when it announced Operation Twist. The idea that moving from short term debt to long term debt while not increasing the size of its balance sheet is somehow “stimulative” is comical. I suppose

WeeklyBasis 9/24: Will 30yr Rates Below 4% Hold?

Rates were down .25% last week—dropping below 4%—on a surprise Fed announcement that they’d buy mortgage bonds to support housing. Below is a recap of last week and a preview of next week to see if rate lows will hold. How Rates Dropped Below 4% Markets got the expected Operation Twist announcement Wednesday—a Fed plan

Record Low Rates Here & Gone. How To Deal With It.

Mortgage traders are drowning in volatility, and it’s not because of Operation Twist. The surprise earlier this week is that the Fed will also start reinvesting maturing cash flows from existing mortgage holdings back into mortgage bonds (it was buying Treasuries) to support housing. Stocks were hit on the FOMC’s gloomy economic outlook and bonds