US government’s actions have not saved real estate market
26 February 2008Sharp downturn of interest rates by Federal Reserve System (FRS) of the USA has not helped the reeled hypothec market, where rates still remain high. Such opinion was stated by Bill Gross – the general director of the world’s largest bonded fund PIMCO.
Since September FRS has lowered the key interest rate on 2,25 percentage items up to a current level in 3 % annual, however, it has not led to decrease in hypothec rates: the interest rate under 30-year hypothec credits of agency Fannie Mae makes 5,75 %. Bill Gross has also noted that “the US has a secret banking system built on derivatives and untouched by regulation”.
Gross has noted that there was no simplification in the hypothec market and, according to him, there was a toughening (of terms), and it is the main thing in comparison with all the rest.
The expert has stressed that the rate is lowered for 225 basic items, and the curve of profitableness reflects 275, so, it is similar to the big simplification for the markets, but the matter that these are the markets, which FRS members wished to affect and nothing has changed.
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