You are here
Mortgage rate rise increases pressure for Fed intervention
By Robert Armstrong and Brendan Greeley
Financial Times, London
Saturday, March 14, 2020
U.S. mortgage rates have risen to the highest level in months despite recent Federal Reserve interest rate cuts, complicating the central bank's efforts to stimulate the U.S. economy as the spread of coronavirus curtails business activity.
The costs to consumers are increasing because of logjam in the $7.5 trillion market for mortgage-backed securities (MBS), where most U.S. home loans are bundled into securities guaranteed by Fannie Mae and Freddie Mac, the government-controlled "agencies," and sold at yields that tend to track those on the 10-year Treasury note.
... Dispatch continues below ...
Transfer Assets and Own Gold and Silver Coins
and Bars in the Safest Way
GoldCore's mission statement since 2003 has been to protect and grow the wealth of our clients, and given growing monetary, cyber, and systemic risks, it is increasingly important to take delivery or have legal title and outright ownership of fully segregated coins and bars.
On all investment and pension purchases and gold and/or silver coin and bars transfers (from banks, ETFs, and digital gold providers) worth more than $10,000 stored in GoldCore Secure Storage in Zurich, Switzerland, we are now offering Secure Storage for free for six months and the gift of a silver bullion coin -- a beautiful, legal tender, 1-ounce Silver Eagle.
GoldCore does not report transactions to any authority, and safety, privacy, and confidentiality are paramount when we are entrusted with safekeeping of our clients' precious metals.
Please visit GoldCore here for more information about this offer:
https://info.goldcore.com/zurich-gold-silver-storage-goldcore-exclusive-...
Key information regarding GoldCore Secure Storage, our partner vaults and jurisdictions, and storage rates is here:
For further information, please email the GoldCore team at info@goldcore.com or call our trading desk:
U.S.: +1-302-635-1160
U.K.: +44(0)203-086-9200
International: +353(0)1-632-5010
As the Fed has lowered rates in recent weeks, consumers have rushed to refinance mortgages, flooding the market with MBS. However, as the coronavirus has spread, banks and brokers that act as intermediaries in the market have struggled to sell the bonds. They also have little appetite for adding more of them to their balance sheets.
“Liquidity in mortgage-backed securities market, which is usually the second-most liquid market in the world after Treasuries, is on par with, if not worse than, what we saw during the financial crisis," said one bank credit strategist. "The market is telling the Fed: If you don't intervene, we are getting away from being a functional market."
As a result, the difference between yields on mortgage-backed securities and those on 10-year Treasuries has doubled since a month ago to 1.5 percentage points -- the widest spread since 2009, during the financial crisis, according to Bloomberg data.
American consumers are feeling the impact. The average rate for a 30-year fixed rate mortgage spiked to 4.12 percent on Friday, up from 3.55 percent at the beginning of the month and the highest since June 2019, according to Bankrate.com.
The development is frustrating for the Fed because it means reductions in its policy rate are no longer translating into lower mortgage rates. It also raises questions about whether a dramatic cut expected at its March 17-18 meeting will have the customary stimulative impact as Americans take advantage of lower mortgage rates to buy homes or generate savings by refinancing existing loans. ...
... For the remainder of the report:
https://www.ft.com/content/a8d5607c-6571-11ea-b3f3-fe4680ea68b5
* * *
Toast to a free gold market
with great GATA-label wine
Wine carrying the label of the Gold Anti-Trust Action Committee, cases of which were awarded to three lucky donors in GATA's recent fundraising campaign, are now available for purchase by the case from Fay J Winery LLC in Texarkana, Texas. Each case has 12 bottles and the cost is $240, which includes shipping via Federal Express.
Here's what the bottles look like:
http://www.gata.org/files/GATA-4-wine-bottles.jpg
Buyers can compose their case by choosing as many as four varietals from the list here:
http://www.gata.org/files/FayJWineryVarietals.jpg
GATA will receive a commission on each case of GATA-label wine sold. So if you like wine and buy it anyway, why not buy it in a way that supports our work to achieve free and transparent markets in the monetary metals?
To order a case of GATA-label wine, please e-mail Fay J Winery at bagman1236@aol.com.
* * *
Support GATA by purchasing
Stuart Englert's "Rigged"
"Rigged" is a concise explanation of government's currency market rigging policy and extensively credits GATA's work exposing it. Ten percent of sales proceeds are contributed to GATA. Buy a copy for $14.99 through Amazon --
https://www.amazon.com/Rigged-Exposing-Largest-Financial-History/dp/1651...
-- or for an additional $3 and a penny buy an autographed copy from Englert himself by contacting him at srenglert@comcast.net.
* * *
Help keep GATA going:
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
