News, analysis and personal reflections on the markets & the financial sector

Tuesday, June 2, 2009

Fed's efforts to keep mortgage rates low come at a price

The Federal Reserve has been buying Treasury bonds and other securities to keep mortgage interest rates low, but the program is proving costly, with only a transitory effect. An analysis by JPMorgan Chase found that the Fed is about 10% "under water" on its portfolio and would take a $5 billion hit if it were forced to mark it to the market value. 

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