I think the Fed’s statements suggest that they really want to exit in some fashion from the buying program. The first step in that direction, logically, would be to stop buying and our sense is that they’re at least going to try that. But based on our forecasts for the second half of the year they may have to re-initiate it, and that will be difficult to do once they stop because it then becomes a political hot potato. All that said, I think they’ll stop buying mortgage agency securities, and the trillion-and-a-half dollar check that’s been written over the past 9 to 12 months basically disappears. It’s significant from the standpoint of interest rates and interest rate spreads in certain sectors. And I would even go so far as to say it might be a mistake.
Pimco’s Bill Gross Sees 2010 as Year of Reckoning
Most Popular Articles
Latest Articles
Pennymac posts first-quarter profit of $39M
Loan production income shrank in the first quarter, but the company’s servicing business continues to grow
-
DOJ charges one of America’s top LOs in alleged mortgage fraud scheme
-
Top Producer Review: Features, pricing & alternatives
-
A&D Mortgage names new servicing manager
-
HUD aims to help protect communities from extreme heat
-
Freedom Mortgage founder addresses ’extraordinary’ credit profiles, profitability and products