Treasury Bonds Keep U.S. Afloat

Summary


Last week, I reported that the Federal Reserve Board intends to keep interest rates low for an extended period of time to help the economic recovery. With unemployment at a 26-year high of 10.2 percent, it is probably a pretty good decision. Mortgage rates have stayed low primarily because inflation continues to remain in check and the Fed is continuing to purchase massive amounts of mortgage- backed securities, which is creating a constant demand for mortgages.

I speculated that even when the Fed ceases these purchases, private investors will step in because the quality of these securities is so much better than the pre-mortgage-meltdown days.

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Extract


Treasury Bonds Keep U.S. Afloat

Since then, I read a column written by a well-known political commentator. Instead of politics, his piece was about the...

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