RateAPY

Unwinding the Fed’s Moves

Posted by: RateAPY Bank Rates News
December 14th, 2009

The Fed made some desperate moves to save the economy during the meltdown. Five of the programs are set to expire before the middle of next year. As the Fed unwinds its extraordinary measures, interest rates on everything from mortgages to deposit accounts will likely go up. This means by the second half of 2010, your savings, certificates of deposit, and money market accounts may be paying you more.

The programs set to expire are:

• New Vehicle Sales Tax Deduction: expiring December 31, 2009–deducting sales, local, and excise taxes on qualified vehicles
• Term Asset-Backed Securities Loan Facility (TALF): phasing out starts March 2010–making consumer credit, such as auto loans, more available while keeping interest rates low
• Mortgage Backed Securities Purchase Program: ends March 2010–adding liquidity to the mortgage market and keeping mortgage rates low
• Home-buyer Tax Credit: contract to purchase must be ratified by April 30, 2010–up to $8,000 for buying a house
• Home Affordable Refinancing Program (HARP): ends June 2010–allows some upside-down homeowners a chance to lock in a lower mortgage rate