All eyes and ears were on Federal Reserve chairman Ben Bernanke Thursday as the Federal Open Market Committee announced another round of quantitative easing in the form of mortgage-backed securities purchases.
What’s clear from Bernanke’s Q&A session with the media is that while savers are not gaining on their deposits under zero-interest-rate policies, the majority of the FOMC sees an advantage to creating stability in the housing sector through low interest rates to entice buyers.
“We are understanding of the fact that holders are receiving low returns,” Ben Bernanke said when asked about the hit savers are taking in today’s low interest rate environment. “But low interest rates support other assets that Americans hold such as homes.”
The Fed also remained committed to keeping the federal funds rate low through at least mid-2015 while saying Operation Twist will last throughout the rest of the year.
While fielding questions from the media, Bernanke subtly hinted that the chairman sees improvements in housing, and the Fed remains committed to ensuring those gains are not lost. “To the extent that home prices begin to rise, consumers will feel the market is healthier,” Bernanke said. As prices rise, people will be more likely to buy homes.”
Bernanke reaffirmed the reserve’s commitment to stroking the nation’s stubborn unemployment rate.
Is Bernanke driving investors toward housing? | South Salem NY Real Estate
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via housingwire.com