It appears the Fed Chairman has had enough of people reading his mind. For the last couple of months markets have been betting that the Fed was planning to stop pouring so much money into the system sooner rather than later. That assumption caused mortgage interest rates to spike since May. But in the last week or so Fed Chairman Ben Bernanke has made several comments that make it clear that he has no intentions of taking his foot off the gas any time soon.
The Fed wants to see unemployment below 7% along with signs of steady sustainable growth in the economy. Speculations about the end of “QE2”, the policy of the Fed buying $85 billion of US treasuries and mortgage-backed securities every month, caused a pretty significant disruption in the markets over the last couple of months. The disruption apparently has gotten bad enough now that Bernanke is seeking to put an end to it. That is good news for mortgage interest rates in the short run. We probably won’t hit all time lows in rates again but the odds of rates continuing to move higher for the next few months look slimmer now than they did before Bernanke made his recent comments.
Rates are still very low by historical measures and hopefully they will stay this low for a couple of months. Contact us in the sidebar now to learn more about the excellent government mortgage programs available.