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.
What happened
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.