Mortgage Rates Near Long-Term Despite Taper Talk

“Taper talk” refers to comments, speeches, or official policy communications from the Federal Reserve (aka “the Fed”) that speak to the timing and nature of a reduction in the Fed’s bond buying activities.  Wow!  What a boring and potentially confusing sentence!  Let’s try again…
The Fed buys bonds–US Treasuries and mortgage backed bonds (which, in turn, serve as the foundation for mortgage rate pricing).  This helps rates move or remain low.  When markets think the Fed is going to stop buying bonds, rates are at risk of moving higher. 
The current bond buying efforts began as a response to the pandemic.  They helped stabilize the financial system and they provided “accommodation” (a boost to overall economic activity intended to support the Fed’s goals on inflation and job growth).  As the pandemic grew more manageable and especially as the economy has come back online, the Fed has increasingly discussed winding down (or “tapering”) the bond buying programs.  …(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.
Source: mortgagenewsdaily.comNew feed