Fed Bolsters Homebuilders

As you are likely aware by now, yesterday the Fed fulfilled expectations for additional easing. What's new compared to other rounds of easing is that the Fed is now taking aim to drive mortgage rates down. In order to help accelerate the nascent improvement in the real estate market, the Fed will be buying $40 billion of mortgage-backed securities per month.

What's also new is that the Fed will be doing this until it is satisfied that economic conditions, primarily in unemployment, improve. Based on the forecasts the Fed shared as part of this announced easing effort, it sees the unemployment rate staying above 7% through 2014. In other words, the Fed will be buying heavily for some time to come. Also, the Fed left its funds rate unchanged at near-zero but offered one change in that regard, saying the rate would stay at "exceptionally low levels" until at least mid-2015....215 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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