The best rate so far came before the Columbus’ Day and left after the
holiday was gone. People always ask when next round of good rate will be
coming. If you have not heard QE II, you should know that even as an
ordinary mortgage rate shopper.
Recently, mortgage rate is not controlled either by black Friday or stock
prices rally, it is driven by Fed’s Quantity Easing program and how the
market is reacting to its investment.
Next meeting is supposed to be held on November 3rd and 4th. A lot of
speculators are rumoring that Fed will launch its QE II program (a second
round of purchases of U.S. government debt to stimulate the economy) to
continue stimulating real estate market. Does that mean we are going to
come below 4% again for 30-year purchase loan? We all have Yes or No. But
before we jump to shoot, we might want to ask us a few questions.
1) Will mid-election affect Fed’s timing in disclosing its decision so
that it will not favor any party?
2) Will the planned amount (trillion or billion) be big enough to tilt
this market?
And finally, does this monetary policy can really save the market and delay
the punishment into the future?
Mixed views are moving the market up and down. And even Fed itself is not
consolidating either. You can put your comments in the air after seeing the
following opinions from Fed’s 12 powerful men and women. The scale is from
1 to 5, with 1 to strongly supporting the easing policy which 5 being
adamantly opposing it.
1 -- CHICAGO FED PRESIDENT CHARLES EVANS
Evans has been outspoken in supporting Fed action to support the recovery.
1 -- NEW YORK FED PRESIDENT WILLIAM DUDLEY
Dudley said on October 1 that further easing would be necessary unless
there is clear evidence the recovery has gained traction. His position in
favor of easing appears to have hardened since then.
1 -- BOSTON FED PRESIDENT ERIC ROSENGREN
Rosengren has said he believes the U.S. recovery has lost momentum and he
thinks it is time for the Fed to resume stimulus efforts to limit the risk
of an economy-sapping, broad-based decline in prices.
1 -- FED GOVERNOR DANIEL TARULLO
Tarullo has been supportive of quantitative easing and analysts expect he
would back a further round of support.
1 -- FED VICE CHAIR JANET YELLEN
Yellen was firmly in the pro-easing camp when she was president of the San
Francisco Federal Reserve Bank and Obama tapped her to be vice chair of the
Board of Governors.
1 -- FED GOVERNOR SARAH RASKIN
The views of Raskin, a recent Obama appointee, on monetary policy are not
well known. However, in her confirmation hearing she called for a renewed
focus on the full employment side of the Fed's dual mandate, suggesting she
will embrace further easing measures.
2 -- FED CHAIRMAN BEN BERNANKE
Bernanke's view will carry the day at the Fed and most other policy-makers
will fall in line behind him. Bernanke has been careful to say there are
risks as well as benefits from more easing, but has in recent weeks signaled
firmer support.
"There would appear -- all else being equal -- to be a case for further
action," he said on October 15.
2 -- ATLANTA FED PRESIDENT DENNIS LOCKHART
Lockhart in recent weeks reluctantly has come around to the view that the
economy is weak enough to warrant further monetary easing from the Fed.
3 -- CLEVELAND FED PRESIDENT SANDRA PIANALTO
Pianalto said she was studying whether more stimuli would be effective.
3 -- ST. LOUIS FED PRESIDENT JAMES BULLARD
He has been a proponent of using quantitative easing as a monetary policy
tool. However, on October 8 he said that while the economy has slowed, it
hasn't slowed so much as to make the case for further easing an obvious one.
4 -- FED GOVERNOR KEVIN WARSH
Warsh had been closely linked to centrist views on risks to the recovery but
last fall showed some hawkish feathers by suggesting the Fed may have to
tighten policy aggressively before clear signs emerge of an entrenched
economic upturn.
4 -- FED GOVERNOR ELIZABETH DUKE
In public remarks, Duke tends to focus more on regulatory issues than on the
broader economy, making her monetary leanings somewhat of a question mark.
