Friday, July 1, 2011

And So It Ends...

The Federal Reserve, which had been propping up the markets for years through various stimulus programs, had for the last nine months purchased hundreds of billions of dollars in US Treasury securities, ended its Quantitative Easing 2 program on June 30. Some think this means that mortgage interest rates will shoot through the roof with demand for higher returns on treasuries by private as opposed to public investors. Some also believe that treasuries will push higher because the Greek government, which agreed to its five-year austerity plan in order to secure an EU bailout, will bring investors back into Europe. As of this writing, the yield on the ten-year treasury bond, which is the mortgage bellwether, hit a seven-week peak to 3.21% It doesn't bode well for a good summer of refinancing.

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