December 14, 2017

Seattle Mortgage Rates Today 2/29/12

Seattle Mortgage Rates Today 2/29/12: What ensued after the ECB’s LTRO?  Yesterday’s post mentioned that the first Long Term Refinance Operation (LTRO) administered by the European Central Bank (ECB) was viewed somewhat negatively as it revealed lingering problems.  The ECB surprised economists when they dispersed 60B Euros more than the expected 470B Euros that banks across the EU readily accepted.  More than 1T Euros have been dispersed between the initial and today’s LTRO.

Where is all the money going?  As of now, markets are not quite sure what to make of the news as the destination of the funds is not clear.  Some funds will go to purchase government bonds and relieve some banks’ balance sheets.  What we should be asking is if any of the funds will be lent out to the private sector.  The purpose of the LTRO is to assist in controlling the current debt crisis; however, those countries in crisis need to grow economically and attempt to pay the borrowed money back.  At the same time, the EU needs the funds to assist in economic recovery.  Spend more and attempt to fix the debt crisis?  We shall learn what comes of that decision in the coming months.

Economic growth in 2011?  Although the 4th Quarter reported an encouraging 3%–which was .2% better than initially reported—the reading is slightly misleading.  The total growth for 2011 was a paltry 1.6%.  Obviously, that kind of growth is not going to aid in lowering the unemployment rate even with the Federal Funds Rate at zero.  Let us note that the 2011 payroll tax holiday produced nearly a 1% increase in GDP—which is more than half of the GDP for all of 2011.

Quantitative Easing 3?  Although many believe that QE3 is not on the agenda, there remains probability that it will be instated.  Let us see what Fed Chair Bernanke has to say at today’s House Finance Services Committee meeting—it may further assist the frail housing market.

Are you considering refinancing your home?  With uncertainty comes unpredictability…do you have the time to wait?  Rates are at an historic low, please contact us and find out what your options are in today’s market.

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