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Let me rephrase that more simply: “Bernanke: Buying alotta stuff drove up the price”
THANK GOODNESS FOR THESE WIZARDS OF HIGH FINANCE
Because look, QE = buying (mostly) mortgage bonds. Buying bonds drives up their price (at least if you’re as big as, oh, say, the Fed). High price for mortgage bond = more money being lent (after the fact) to homebuyers = lower mortgage rates.
So yes, it’s not surprising if QE ‘brings down mortgage rates’ anymore than it would be surprising if the Fed bought up tulips and then the price of tulips went up. The real question is, why should we want that.
Do we now think mortgages have been generally too hard to get in the past 10 years? Is that the Lesson Of The Crisis?
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