Mortgage Rates Rise, Despite New Federal Policy

Mortgage rates have been slowly climbing in recent weeks, even as the housing crisis lingers. This wasn't how it was supposed to go, according to the Federal Reserve's quantitative easing initiative. Charles Hugh Smith of our sister site, DailyFinance.com, explains why things aren't proceeding quite as planned.


Keeping interest rates low is a linchpin of the Federal Reserve's quantitative-easing policy (QE2), a $600 billion bond-buying program aimed at stimulating the economy. The basic idea is that low rates will encourage businesses to borrow and expand -- including hiring more employees -- and will boost housing sales by making mortgages cheaper for potential homebuyers.