Mortgage-Bond Carnage Shows What Future Holds Without Fed Help

Mortgage-Bond Carnage Shows What Future Holds Without Fed Help

Assessment

Interactive Video

Business

University

Hard

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The video explains how borrowing costs for home purchases are rising faster than treasury yields due to the Federal Reserve's cessation of mortgage debt purchases and its plan to reduce its holdings. This has led to increased spreads on mortgage debt compared to treasuries, marking the largest rise since November 2016. The discussion highlights concerns about higher future borrowing costs for homebuyers.

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2 questions

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1.

OPEN ENDED QUESTION

3 mins • 1 pt

What trend is observed in the spreads on mortgage debt compared to Treasuries since November 2016?

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

What implications does the increase in borrowing costs have for potential homebuyers?

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