During some of the research, a stumble on to the follow chart occurred. Being totally unrelated to our Newsletter information, but very eye catching and interesting, a share was in order!
From our Friends at JPMorgan and their Market Insights Slide deck:
What is most striking to the eye, or at least our eyes, is the disproportionate amount of MBS (Mortgage Back Securities – think packs of Mortgages) the Federal Reserve purchased during this latest round of asset purchases.
This month the Federal Reserve has stated they are now pushing 97 Billion dollars of these assets back into the market, up from a prior mentioned 40 Billion monthly sale.
This may be a reason that Current Mortgage Rates are by almost any measure WAY to high, compared to their historical normal spreads between other similar assets.
Bottom line, the Federal Reserve likely over pushed rates low and they may be doing just the opposite now.
Just as eventually the sugar wears out, so will the salt of higher rates!
Have a Great “Had to Share a Neat Fed Chart” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth