QE3 Moves Freddie Mac Economists to Revisit Projections

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Posted To: MND NewsWire

Freddie Mac is revisiting its economic projections for the remainder of 2012 and 2013 due to the announcement by the Federal Reserve of its Maturity Extension Program known as " QE3 ." Under the program the Fed will increase its purchases of agency mortgage-backed securities (MBS) by $40 billion per month while continuing the term extension (also known as Operation Twist) of its portfolio. Taken together the two programs will increase the Fed's holdings of longer term securities by about $85 billion through the end of 2012. The Fed hopes to encourage lower long-term interest rates , especially on fixed-rate mortgages and through them stimulate further housing market activity. Moreover, the increased housing demand stimulated by QE3 may partly offset (albeit by a small amount) the substantial...(read more)

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