November 25, 2008
November 25, 2008 by admin
The stock market looks to extend the record two day rally as the Fed announces a new plan aimed at helping to restore lending in consumer markets as well as purchasing six hundred billion dollars worth of mortgage backed securities. The Fed will directly purchase 100 billion of mortgage backed loan securities from Fannie Mae and Freddie Mac, in addition the Fed will purchase 500 billion worth of loans backed by the agency lenders. These moves are an effort to try to free up capital and restore lending to consumers and home owners.
The stock market has rallied over 9% during the last two days as the market welcomed news of the bailout of Citigroup, as well as appointments from President elect Obama. Mortgage rates have moved up this week with the positive news from the stock market. The ten year bond was trading at 3.15 with the news. Mortgage rates are hovering in the low six percent range and could move under six percent as lenders reduce their expected profit margins with the new influx of capital. Oil prices continue their decline and this is helping to boost consumer confidence as well as provide needed capital relief.