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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (6503)	11/2/2002 3:47:50 PM
From: GraceZ	Read Replies (2) \| Respond to of 306849

Its doubtful the Fed will lower rates even though I can guess that they are under tremendous political pressure to do so. Its incorrect that the Fed is "printing". The Fed has cut permanent creation in half in the last five months and did zero coupon passes in October. Message 18171991 If you want to double check my figures. Message 18172496 I challenge anyone to show evidence that the backing off in permanent creation is being made up with an increase in RP float. The RPs they have conducted in the last month (some of which have included MBS) or so have been in defense of their interest rate target. Clearly short term rates want to rise. Although it's tempting to find some devious motive, the only reason the Fed winds up buying MBS is because they have to make an effort to spread their operations over different types of securities so their own buying doesn't unduly influence any particular market for bonds.