Click through the timeline below to see the effect the Fed's moves had on mortgage rates.
QE2: Nov. 3, 2010 - June 30, 2011
What the Fed did
- The Fed continued to reinvest payments on securities purchased during the QE1 program.
- In addition, it began the purchase of $600 billion of longer-term Treasury securities.
What was expected
The Fed said QE2 would help promote a stronger pace of economic recovery. Industry observers expected QE2 to keep mortgage rates low or push the rates lower.
Contrary to what was expected, mortgage rates spiked more than half a percentage point in a little more than a month after QE2 started. When the program ended, the 30-year fixed-rate mortgage was about 30 basis points higher than it was when QE2 started.
How mortgage rates reacted during QE2
Note: Mortgage figures are from Bankrate's weekly national survey of large lenders.