Yesterday the Federal reserve announced steps that are intended to lower mortgage rates and provide liquidity to the banks. The Fed will buy treasuries and Mortgage Backed Securities.
Mortgage rates responded by falling 25 bases points, the stock market rallied. The US dollar dropped in value coming off of some very lofty levels.
The questions are:
- Will the lower rates stimulate home buying?
- Will the liquidity help to provide consumer loans?
- Will the lower dollar stimulate exports and stabilize manufacturing jobs?