US Credit Rating Put on Notice As Debt Limit Negotiations Sputter Along

After starting yesterday slightly lower, mortgage pricing improved later in the day yesterday, as Fed Chairman Ben Bernanke’s testimony to Congress hinted that additional stimulus could come in the event that employment growth remains weak. How the Fed would achieve this remains uncertain, as it can’t lower rates, and its debt purchase programs have only been marginally successful. I’ve been advocating for a cessation of interest payments to banks on reserves they leave at the Fed, but I have read few analysts repeat that suggestion. Beyond this, the Fed doesn’t have much in the way of options to further stimulate growth.