OK, I’m not a fan of the name of this new government plan. It will be amazing to see interest rates on mortgages go even lower than the historical lows that we are at and years from now in the real estate industry I’ll be able to wistfully look back and say “I remember when interest rates were 4%” while we are at a then staggering 8% or something.
As with almost all things in the real estate market, I will wait and see what the future brings. If I only had a crystal ball…
From CNN Money
The Federal Reserve announced “Operation Twist” Wednesday, a widely expected stimulus move reviving a policy from the 1960s.
The policy involves selling $400 billion in short-term Treasuries in exchange for the same amount of longer-term bonds, starting in October and ending in June 2012.
While the move does not mean the Fed will pump additional money into the economy, it is designed to lower yields on long-term bonds, while keeping short-term rates little changed.
The intent is to thereby push down interest rates on everything from mortgages to business loans, giving consumers and companies an additional incentive to borrow and spend money.