Why are mortgage rates up if the Fed is cutting?
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, fed, Mortgage Interest Rates March 3rd, 2008Fed Chairman Ben Bernanke explains credit spreads to Congress
A lot of readers have been wondering why mortgage rates are jumping — even as the Federal Reserve is busy cutting interest rates. This week, Fed Chairman Ben Bernanke makes a special guest appearance at the Answer Desk to help explain what’s going on.
Why is it, that even though Bernanke and the Fed have been lowering interest rates, ostensibly to “help the economy and the housing market”, the rates on 30-year mortgages have actually risen?
— Brian W., Knoxville, Tenn.
One of the more touching moments of Mr. Bernanke’s two-day testimony on Capitol Hill last week came when Democratic Congressman Luis Gutierrez of Illinois quizzed the Fed Chairman on this very subject.
The Congressman told the Chairman of making a call last month to his daughter, a first-time home buyer, to offer her some fatherly guidance on locking in her mortgage rate.
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