Mtg rates are up by over a full 1%, because the Fed may scale back on QE. But it hasn’t scaled back yet. But rates are way higher anyway.
So the question is, does QE per se keep down rates?
Or does it just about signals?
So when this last round of QE began, why did rates go down? It couldn’t have been just because the Fed was going to buy, which would then drive rates down, because it’s now already bought, and will continue to buy, yet rates are suddenly far higher.
Nor did rates fall with QE because market participants though it would make the economy worse?
It’s about rates falling on the belief that Fed buying per se would bring them down, and now rates are higher on the belief that the Fed not buying as much means rates go higher. Even though it’s been demonstrated that the amount or pace of Fed buying per say doesn’t do that.
There is no way to make any sense out of it.
It’s just knee jerk reactions in a sea of ignorance.