The Dog That Didn’t Bark?

So, the Federal Reserve finished its massive, $1.25 trillion purchase of mortgage securities almost three weeks ago.

Have mortgage rates spiked upwards since then?

Nope, they’re basically unchanged.

What could that mean?

Other investors — supplying fresh capital — have taken their place (the “supply explanation”); a weak economy is keeping demand for mortgages — and therefore rates — low (the “demand explanation”); and/or the Fed’s exit was so loudly pre-announced that the bond market already anticipated it (“other”).

As they say, “buy the rumor, sell the news.”

Any other “Other” plausible explanations, anyone?

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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