Find the latest episode of "This Is Uncomfortable" here. Listen
Fallout: The Financial Crisis

Fed’s $1 trillion injection has its risks

Janet Babin Mar 19, 2009
HTML EMBED:
COPY
Fallout: The Financial Crisis

Fed’s $1 trillion injection has its risks

Janet Babin Mar 19, 2009
HTML EMBED:
COPY

TEXT OF STORY

Steve Chiotakis: The Fed’s move is having an immediate impact in the mortgage market.
From North Carolina Public Radio, here’s Marketplace’s Janet Babin.


Janet Babin: If you’re looking to refinance your mortgage and you’ve got good credit, Google “refinance.” You’ll see some eye-poppingly low rates. Quicken Loan’s site is promising 4.5 percent. Other sites are offering rates near record lows, too.

Dean Barber with Barber Financial Group says the Fed’s decision to buy up government bonds and mortgage-backed securities could help turn the housing market around.

Dean Barber: The hope, in my opinion, that could come from this is that people can refinance their loans and we can slow the rate of foreclosures.

Barber fears, though, that lower rates won’t help enough homeowners. He’s also worried about the value of the dollar. It fell against most currencies yesterday in reaction to the Fed’s buying frenzy.

Edward Hadas is with BreakingViews.com. He explains that this cash infusion could have a good effect for awhile, but:

Edward Hadas: Too much cash for too long will unleash a lot of inflation.

For the moment, the Fed is willing to take that gamble, with unemployment rising and consumer confidence low.

I’m Janet Babin for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.