The Fed now owns nearly 1/3 of all U.S. mortgages
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The Fed now owns nearly 1/3 of all U.S. mortgages
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Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#2In case anyone else was wondering how this might compare to "normal":
>Morgan Stanley analysts pointed out in late March that the buying was running at eight times the pace seen in prior episodes of Fed purchasing under programs known as quantitative easing.
>Just before this latest round, principal payments from its mortgage bond holdings had whittled that down to 21%, but it has now increased back to 30%.
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#3Does the fed get the interest income from those mortgages? Because if it’s not getting 100% of that interest it’s simply bailing out speculative loans by banks.
What are the rules for the fed taking on mortgages etc? I would want a max price of 80% of the value of the mortgage alongside the all proceeds portion so that banks can’t just make bad loans and then onsell them to tax payers
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#4That is interesting, but can someone explain why this is a bad thing?
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#5I just refinanced my 30-year fixed mortgage for 2.5%. The rate is utterly ridiculous now. If we get even a modicum of inflation over the next few years, I will be paying negative real interest rates.
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#6[flagged]
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#7I keep thinking of all the huge amount of asset purchases by the Fed, especially legally dubious purchases like corporate bonds, that "this won't end well".
That said, I don't really know what "not ending well" would look like. Would it just be total runaway inflation? Can anyone more knowledgeable comment on what possible endgames are for these asset purchases?
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#8I keep thinking of all the huge amount of asset purchases by the Fed, especially legally dubious purchases like corporate bonds, that "this won't end well". That said, I don't really know what "not ending well" would look like. Would it just be total runaway inflation? Can anyone more knowledgeable comment on what possible endgames are for these asset purchases?
The worst case scenario is the rest of the world dumping US treasuries, and causing interest rates to skyrocket and USD to plummet.
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#9Does the fed get the interest income from those mortgages? Because if it’s not getting 100% of that interest it’s simply bailing out speculative loans by banks. What are the rules for the fed taking on mortgages etc? I would want a max price of 80% of the value of the mortgage alongside the all proceeds portion so that banks can’t just make bad loans and then onsell them to tax payers
[deleted]
Re: The Fed now owns nearly 1/3 of all U.S. mortgages
#10I keep thinking of all the huge amount of asset purchases by the Fed, especially legally dubious purchases like corporate bonds, that "this won't end well". That said, I don't really know what "not ending well" would look like. Would it just be total runaway inflation? Can anyone more knowledgeable comment on what possible endgames are for these asset purchases?
The worst case scenario is the rest of the world dumping US treasuries, and causing interest rates to skyrocket and USD to plummet.
Why would that happen because the fed owns a lot of mortgage debt? I don’t see the connection.