Fed Will Pull the Rug

Posted by Mark Motive on January 27, 2010 Economics Add comments

Jan 272010

– Fed plans to execute its withdrawal from the MBS market in March

- This will pull the rug from the nascent housing recovery

- Dropping MBS purchases, which have indirectly been supporting US Treasury market, will make government financing more difficult

- Of course, Obama plans to freeze non-core spending

Let’s see how this plays out…but it seems premature, given the fragility of the market and the double-digit unemployment rates.