Federal reserves can control the fed rate . When Fed buys
securities from the market the cash will be released into the
economy this reduces the reserves in the banking systems and the
fed funds rate decreases. When Fed sells security cash will be
bought from the economy, the fed rate will increase and reserves in
the banking system will increase.
This rate affect mortgage rates in the long run . As fed changes
rates the banks also change their rate which affect the mortgage
rates. They can also be affected by quantitative. With quantitative
liquidity in banks increase and hence mortgage rates fall.
Yes mortgage rate will be affected over the next year.Since mortgage loans are long term rate and the rate of treasury bonds are for 10 and 20 years. The affect of change in discount and fed rates will affect for long time.
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