September 18, 2013
Fed Backs Off Tapering Talk, Expect Mortgage Rates To Ease
Concerned that rising interest rates might stall the consumer spending and economic growth which the Federal Reserve engineered by driving down the cost of borrowing and incentive to save, the Fed is backing away from hints that a tapering in their bond buying program will commence before the end of the year which should cause mortgage rates to ease over the next few weeks.
First Published: September 18, 2013 1:30 PM
Comments from "Plugged In" Readers
the Fed first announced QE-related purchases of MBS in November 2008. The S&P 500 has gained over 45% since that time.
So the incentive to save was and is still present, it's just that one needed to cash out any savings parked in instruments like cash under the mattress, bond funds, money market funds or certificates of deposit and invest them in a low-cost U.S. stock index fund instead.
Posted by: Brahma (incensed renter) at September 18, 2013 4:09 PM
A great irony of Summers' dismissal from the Fed Chief candidate list (due to his Wall Street ties) is that Yellen will likely work harder than Summers would have to keep rates low until unemployment goes down, making her even more friendly to risk-takers, on Wall Street and elsewhere.
Posted by: soccermom at September 18, 2013 4:29 PM