So what do you think mortgage interest rates will do after today’s 2:30 release of the Fed minutes? I have been tracking this day since early July as “The Day” and wanted to give you a few talking points that might be of use to you.
The Fed will put out details to their quantitative easing plan and that will begin next month. They will adjust their buying down from the $85 Billion per month by $10-15 Billion. Each month the Fed buys both Treasuries and Mortgage Backed Securities and it is my belief they will reduce their buying of Treasuries first. But how long will it take for them to completely stop their buying and what will they use as their target? It will be based on how the economy does, what the unemployment rate drops to and what does the housing market do?
Will mortgage rates go up after the news today? I believe there will be a kneejerk reaction quick when the news releases but then feel that will change. When Ben Bernanke made his comments months ago about quantitative easing the markets priced that news immediately into mortgage rates, we all saw them move up quickly. The market has had uncertainty the whole summer with speculation of what the Fed will do – well today we will know and that gives the market clarity. That clarity will stimulate a mortgage market rally over the next few days and weeks. How far mortgage rates drop is up for debate – will the 30 year mortgage rates go back into the 3’s?
Have a great, Mortgageific day on this Fed Day!