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7-20-2017- Mortgage Rates Hold 3-Week Lows After European Central Bank Announces the ECB's bond buying program For The Time Being Will Remain Capped At €60 Billion Per Month And Its Interest Rates — a deposit rate of -0.4% for banks, and a base interest rate of 0.0% will be maintained and unchanged.

July 20th, 2017 4:05 PM by Narbik Karamian

 

Mortgage Rates in the U.S held relatively steady (slightly lower) today, keeping them in line with the lowest levels in more than 3 weeks.  There was relatively little market movement in response to the policy announcement from the European Central Bank (ECB).  That's a good thing considering much of the recent gains in rates can be attributed to traders growing more optimistic about the ECB's stance.

To put all this in plain English, the ECB buys bonds (similar to the Federal Reserve’s Quantitative Easing program that started in 11/2008 and ended in 11/2014 to help keep the U.S. economy functioning). This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit). There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds. While that day will likely come eventually, today's announcement assures markets that it hasn't been discussed yet.

Posted in:General
Posted by Narbik Karamian on July 20th, 2017 4:05 PM

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