Why Mortgage Rates Are Rising

Is the Fed's operation twist failing?


"When you think about the fact that [the Fed was] trying to lower rates even further to spark the economy, at a certain point you have to wonder 'Are we going to reach the point of diminishing returns?'" Marimow says. "There are others who believe that it's not necessarily low rates, but that we really need to help troubled homeowners, ones with negative equity in their homes who are not eligible to refinance."

With the Fed's Operation Twist in place, rates are likely to remain low barring any major shock to the financial system. However, it remains to be seen just how low rates will benefit struggling homeowners, on whom some say the recovery of the housing market, and perhaps the economy, hinges.


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