Art Cashin on the Fed’s “Operation Twist” – Making Way for Massive Government Refinancing of Mortgages

From Zero Hedge this morning….some key quotes from Art Cashin…

 As to “Operation Twist” – two key take-aways concerned mortgages and operational problems. The Fed will now reinvest maturing MBS payouts in new MBS purchases. They had been using the MBS dough to buy treasuries. By shifting mortgage payouts back into mortgages (and also targeting the 10 year Treasury) suggests the Fed is going “all in” to cut mortgages and dislodge a frozen real estate market. It would also put the Fed in a good spot to help facilitate a major government sponsored re-financing initiative (rumored for weeks). When Republicans awaken to this, expect a good deal of pushback on the “helping the re-election” mode.

Alex Stenback on the Federal Reserve’s New Stimulus – “Operation Twist”

Alex Stenback from RMG has some good insight on the latest “operation twist” from the Federal Reserve and it’s likely impact on mortgage rates.  He says it’s quite possible we’ll see mortgages in the mid 3’s – certainly upper 3’s is a no brainer.

Those involved in purchase transactions or even refi’s and are waiting to lock, stay in close touch with your loan officer to see if you won’t be able to pick up an extra 1/4 to 3/8ths of a point over the next week or two.