What would be the impact on mortgage rates if they rapidly dumped these assets?

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Jun 14, 2022
3:01:06pm

PROBcoug Starter

What would be the impact on mortgage rates if they rapidly dumped these assets?

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PROBcoug

Bio page: PROBcoug
Joined: Apr 2, 2002
Last login: Apr 29, 2024
Total posts: 1,412 (0 FO)

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Messages

Author

Time

Yes, the Fed was way too late on rate increases, but the bigger issue is their

Gente_Boa

6/14/22 2:58pm

What would be the impact on mortgage rates if they rapidly dumped these assets?

PROBcoug

6/14/22 3:01pm

Spike

Big Daddy D

6/14/22 3:02pm

Less demand for MBS, rates go up

Backcountry

6/14/22 3:21pm

It reduces available credit in the economy and drives up interest rates even

Skeptical Optimist

6/14/22 3:22pm

RE: Yes, the Fed was way too late on rate increases, but the bigger issue is

WDaddy

6/14/22 3:03pm

They are SLOWLY starting to do that. They will only have sold off $100B by end

BYU-Ite

6/14/22 3:03pm

my understanding is they are not actively selling, they just are not

Gente_Boa

6/14/22 3:14pm

This is correct.

Skeptical Optimist

6/14/22 3:16pm

That makes sense. Thanks for the clarification!

BYU-Ite

6/14/22 3:27pm

It's a little faster than that. $47.5B per month for June-August, then $95B per

Skeptical Optimist

6/14/22 3:14pm

Also makes sense. Thanks!

BYU-Ite

6/14/22 3:28pm

RE: Yes, the Fed was way too late on rate increases, but the bigger issue is

panacablue

6/14/22 3:27pm

You are correct stating the problem is a balance sheet, but its all about DEBT

The_Cuss

6/14/22 3:53pm

The biggest issue with the FED is it’s existence.

Skipshot

6/14/22 4:18pm

I can't agree with that. I'd rather have the FED conducting monetary policy than

Skeptical Optimist

6/14/22 4:58pm

Well, I guess other than it’s bad policies and unconstitutionality, at least

Skipshot

6/14/22 9:09pm

Increasing fear on the street that reducing the Balance Sheet too quickly could freeze up credit markets. Powell is

roseyscenario

6/14/22 4:30pm

That will never happen with Biden. And US production is basically maxed out

The_Cuss

6/14/22 6:54pm

Oil prices would drop sharply and instantly when it became clear Biden would fully support increased production.

roseyscenario

6/15/22 7:34am

If the short term supply isn’t maxed out why not produce more now? And have

The_Cuss

6/15/22 7:44am

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