Mortgages, The Fed and European Debt

by | Apr 28, 2010 | How to Guides, Uncategorized

This week the Fed announced that they will be keeping rates at historic lows for an extended period – in Fed speak that means six months. While this rate has an effect on the mortgage rates it is more closely tied to the bond market. So why is the bond market doing so well right now? Any time there is uncertainty in the stock market people flock to the relative safety of the bond market. We’re also seeing global interest in American bonds after it was announced that many European countries are having their debt ratings downgraded. This means America is a safer bet right now and we don’t have to offer higher rates because the investment here is safer. Not the best news for the stock market or the economic recovery but the benefit is it should keep mortgage rates at their historic lows a bit longer.

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