Rising yields mean loan rates are likely to end 2010 almost 0.75 percentage point higher than they are currently, based on forecasts for government bonds and spreads, adding to challenges for a housing market struggling to recover from its worst slump since the 1930s.
The Fed may decide to continue purchasing mortgage bonds if the rebound in the property market proves short-lived, Invesco’s Anzalonesaid. Bernanke said in Dec. 3 testimony to Congress that officials “will have to see how the economy is evolving and whether or not we need to do more.”
Read more at Wall Street Journal
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