FINANCIAL TIMES: … [Bill Dudley, president of the New York Fed] said officials should consider ways “to foster competition in mortgage origination to ensure a more complete pass-through of low secondary mortgage rates to households”.
Failure to pass on low mortgage rates reduces the effect of Fed stimulus, because consumers have less money left in their pockets, and fewer people can afford to buy a house.
The Fed’s new $40bn-a-month, open-ended programme of quantitative easing, known as QE3, has driven down the yield on mortgage-backed securities. But the interest rate on new mortgages for consumers has not fallen in line… (more)
