Maybe politics played a role here, but the truth is that the Fed's interest rate has remained unchanged since December 2015 but mortgage interest rates have been inching up for most of this year.
The Fed was keeping interest rates low before the election to give Hillary a better chance at winning the election.
Yes.
Trump did say “yellen and the Fed have become politicized in the debate.
Higher interest rates = stock market crash = politicized Fed but they’ll blame it on Trump. Yellen should be replaced.
“Mortgage rates are tied to Treasury yields, and Treasury yields are climbing because more and more Treasury bills purchased by the Fed under all the QE programs are maturing. $200+ billion in these Treasuries matured in 2016, but over $1 trillion are maturing next year.”
I’m trying to figure out what effect this would have on the money supply. I suppose nothing, since the Fed already monetized the QE debt when they purchased it.
What it does do is remove the ability of the Fed to sell these bonds in order to reduce the quantity of liquid money. I think that the Fed now has the ability to issue their own bonds for that purpose but as far as I know they have never done this.