We’re with R.E.M. when it comes to the end of the Federal Reserve’s quantitative easing program: “It’s the end of the world as we know it (and we feel fine).” Michael Stipe isn’t known for his musings on monetary policy, but it’s a good metaphor — for now. The unprecedented program, which in late 2008 began injecting over $1 trillion into our economy — mostly through the purchase of mortgage debt issued or guaranteed by Fannie Mae and Freddie Mac — has come to a close as of March 31st. And we’re all still standing. While many market observers expected the ending of this policy to lead to an increase in interest rates, particularly for mortgages, we have seen only a marginal change. In fact, over the last three weeks, 30-year fixed mortgage rates have only increased from 5.05% to 5.25%. In essence, the quantitative easing world has ended, which could’ve led to a scenario where everybody hurts. Instead, people getting new mortgages still “feel fine.”
