Will Additional Fed Stimulus Cause Lower Mortgage Rates?
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Whether or not QE2 will be successful in stimulating the economy is a more difficult question
, and I left my crystal ball at home today. Paul Krugman of the New York Times has suggested that we need $8-10 trillion worth of QE. This seems unlikely to happen. Opinions on the effectiveness of monetary policy for relieving our current situation vary. Interest rates have been near zero for more than a year, and the economy is still struggling. Only time will tell, but it is entirely possible that the Fed is simply pushing on a string here. The next Federal Reserve meeting occurs November 2-3, so we will know more at that time.
Will Additional Fed Stimulus Cause Lower Mortgage Rates?