The Federal Open Market Committee, the group of Federal Reserve governors who determines the direction of our nation's economic policy, released their statement yesterday. While the policy statement did not offer any major surprises, they reminded us that the economic recovery will be slow and announced a new operation where they will purchase Treasury debt in the open market. This action was aimed at preventing the spread of fear in the marketplace. After the Fed announced this decision, stocks sold off and benchmark interest rate moved significantly lower as another "flight to safety" poured into Treasuries. A flight to safety happens when investors are nervous about owning risky assets like stocks, but do not want to miss out on earning a return on their funds, so they allocate…(read more)
Mortgage Rates Move Lower as Flight to Safety Pours into Bond Market
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