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Unless the Fed cuts rates, how can mortgage rates plunge? Is CNBC doing it's old (and maybe continuing) cheerleading?
by wolverine876 3y ago
Unless the Fed cuts rates, how can mortgage rates plunge? Is CNBC doing it's old (and maybe continuing) cheerleading?
- quickthrowman 3y agoMortgage rates mostly track the 10y yield, not the federal funds rate. As I understand it, avg US mortgage duration is 9-10y which is why mortgage rates track the US10Y yield. The Fed doesn’t directly control the 10y yield like they do the federal funds rate
- HDThoreaun 3y agoThe fed absolutely has control over treasury yields. They're by far the biggest buyer of all the treasuries through their open market operations. By buying more or less they can change the price.
- quickthrowman 3y agoI’m aware that open market operations affect the 10y yield, my point was that the market has more influence over the 10y yield than the federal funds rate.