Michael BeckerMortgage banker, Happy Mortgage, Lutherville, Md.
As expected, the Federal Reserve announced its second round of quantitative easing, or QE2. The Fed said it would purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. This is about the size of QE2 purchases the market was expecting.
Leading up to the announcement, rates had been declining, perhaps in hopes of a larger amount of Treasury purchases. After the announcement, yields on Treasuries jumped a bit. I believe this is because the amount of easing was not greater. Given the fact that the stated amount of easing was just about what the market was expecting, I see mortgage rates holding steady in the coming week.
David KuiperMortgage planner, First Place Bank, Holland, Mich.
Now that the midterm elections and the Federal Reserve announcement are in the rearview mirror, we can take a momentary breath. Neither of the results were much of a surprise, and the markets seem to have shrugged them off, having made assumptions earlier and building this into pricing in advance. Interest rates will continue to remain at or near all-time record lows for the time being.