Fed to keep buying mortgage securities

June 24th, 2009, 12:52 pm · 6 Comments · posted by Mathew Padilla

The Federal Reserve today said it will continue to buy up to $1.25 trillion in mortgage securities by the end of this year and that it is maintaining its target for a benchmark interest rate at between zero and 0.25 percent.

Some market watchers have hoped the Fed would buy more securities than previously announced to push down mortgage rates, which are above 5%.

But the Fed also has to face concerns a $1 trillion expansion of its balance sheet over the past year to $2.07 trillion will fuel inflation, drive up interest rates, and hamper any potential economic recovery. The Fed said:

The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Read the full statement HERE.

What do you think?

Should the Fed expand its purchases of mortgage securities?

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lee in irvine says:

June 24, 2009 at 3:20 pm

You know, this has become stupid! I feel violated by this perverted trick of subsidizing mortgages so dolts can overpay for OC real estate, therefore delaying the inevitable collapse. When are these unsustainable schemes gonna end … all we’re doing is kicking the can down the road.

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Coco says:

June 25, 2009 at 9:15 am

You are soooo right Lee. Every time I hear about the government buying this or guaranteeing that, I cringe. And life goes on like nothing happened with these bailed out banks and the rest of Wall Street.

Like you and others, I’m just waiting for this new “mini-bubble” to burst. It’s just a matter of time.

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Liar Loan says:

June 24, 2009 at 3:34 pm

All those people hoping for mortgage rates to explode will have to wait…

rants says:

June 24, 2009 at 8:53 pm

and all the dolts that overpaid for their stucco box and are hope’n
and prayin for hyper-inflation to bail them out are really gonna have
to wait– ask the japanese whove been waiting for over 15 years
after their government tried the very same tricks that ours is now
doing- poor liar it must be hard livin in an unpside down mortgage

Liar Loan says:

June 25, 2009 at 9:30 am

It’s actually quite easy. See my response to you here: http://mortgage.freedomblogging.com/2009/06/24/mortgage-applications-rose-on-dip-in-rates/12617/#comment-31205

Next year, I will probably double down and buy my second property. I need more tax write offs.

Post Reply

June 25, 2009 at 1:16 am

fed to keep buying toxic mortgages- in violation of their authority
to do so- hopefully this will be coming to an end- beginning with
bernankes testimony tomorrow on capitol hill where he will be
grilled-hopefully- on his role in coercing Bof A into buying merrill
lynch and all their bogus mortgages… next up fannie and freddie
and their can of worms– could this be the beginning of the end
of their reign of fraud? stay tuned dear readers– its gonna get
real interesting

http://market-ticker.denninger.net/archives/1156-More-Bernanke,-Mr.-Issa,-And-The-Media.html

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