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### Did quantitative easing reduce US mortgage rates?

Submitted by: BBlack 104**Yes. Note that some studies in this list give us reason to question their conclusions. This may be because they were criticized in an article, produced by a financially interested or ideologically motivated source, or were published in sources that are not peer-reviewed, are low ranked or not ranked at all, which may indicate limited editorial oversight. Carefully review the individual study summaries below for more information.**

This short answer was generated by aggregating the answers that each of
the 3 studies below
gave to the question (as indicated by State of K members) and adjusting for source quality and other factors.
If key studies are missing or the answers attributed to individual studies are incorrect, the above answer could be wrong.
For medical questions, don't rely on the information here. Consult a medical professional.

3

YES ANSWERS

0

NO ANSWERS

0

NO DATA ON ANSWER

Chart summary of 3 studies examining this question

All answers are assigned by State of K users. The label

**Couldn't Identify**means that State of K was not able to determine whether a study answers the question "yes" or "no". This could be due to several factors. One possibility is that a study found some evidence to indicate that the answer to the question is "yes" and some evidence to indicate that the answer is "no". This often happens when a study uses two or more proxies to study the same phenomenon (i.e. firearm sales figures and self-reported firearm ownership rates as proxies for the prevalence of firearms) and the proxies yield different results when looking for correlations with another phenomenon (i.e. firearm-related deaths). Alternatively, the label may be applied if the phenomenon under study (i.e. whether breast milk improves cognitive function) is true for one group, but not another (i.e. true for girls, but not for boys). Yet another possibility is that a study found there was insufficient evidence to reach a conclusion regarding the question. Finally, the full text or abstract of a study may not have been written clearly or was inaccessible. This would make it difficult to determine how a study answered a question.

All labels of

**Literature Reviews**and source quality are assigned by State of K. For academic journals, the label "Q[NUMBER]" is an indication of the quality of the publication. The "NUMBER" refer to the best quartile in which the journal appeared among all the subjects in which the journal was ranked by Scimago Institutions Rankings. For example, if a journal was ranked in the third quartile (Q3) in infectious diseases, but in the second quartile in Ebola studies (Q2), you would see "Q2". The best quartile is "Q1". Publications other than academic journals may be labeled as "Highly Regarded Sources". Government sources receive this label as do NGOs ranked by the TTCSP Global Go To Think Tank Index Reports. The information contained in a source that is labeled "highly regarded" or "Q1" is not necessarily more accurate than information contained in a source without that label, but these are rough guides to source quality.

QUESTIONS TO CONSIDER

Does quantitative easing reduce interest rates?

Does money invested 50% in a US stock index fund and 50% in a US bond index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

Does money invested in a US stock index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

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9 studies

Submitted by: VLieu 0

Does money invested 50% in a US stock index fund and 50% in a US bond index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

11 studies

Submitted by: BBlack 104

Does money invested in a US stock index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

18 studies

Submitted by: KKrista 77

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SUMMARIES OF STUDIES

Total studies in list: 3

Sorted by publication year

1

###### The Effects of the Fed's Quantitative Easing Announcements on the U.S. Mortgage Market: An Event-Study Analysis

"This paper uses regression based event-study analysis to examine the response of the 30-year mortgage rate to the Federal Reserve’s Quantitative Easing (QE) announcements in zero lower bond period. A total of 35 QE announcements from 2008 to 2015 are selected in reference to previous literature and my own discretion. Each announcement is then identified by a certain type and in a QE round. After model validation, the best-fitting IGARCH model with skewed t distribution is used to measure the QE announcement effects on daily changes of 30-year mortgage rate, 30-year Treasury rate and the spread between them. Abnormal returns (changes), cumulative abnormal returns and their long-run values of the mortgage rate for each announcement within 1-day, 3-day and 5-day event windows are calculated and reported. In event windows, announcements suggesting the start of a new round of QE reduced the mortgage rate tremendously, while the effects of further news conveying a continuation of the current QE policy diminished. Announcements of an increase in mortgage-backed security purchases decreased the mortgage rate more than the Treasury rate and reduced the credit risk of holding mortgage securities over Treasury securities. Two robustness checks find that the shocks of macro-economy and mortgage rate determinants were trivial in influencing abnormal returns and cumulative abnormal returns of the mortgage rate on average, and the results do not change so much if the model is controlling for the 10-year Treasury rate instead of the 30-year Treasury rate."

AUTHOR

Gang Wang

PUBLISHED

2016 in SSRN Electronic Journal

UNRANKED SOURCE

Yes

Yes

2

###### How the Federal Reserve's Large-Scale Asset Purchases (LSAPs) Influence Mortgage-Backed Securities (MBS) Yields and U.S. Mortgage Rates

"We conduct an empirical analysis of the Federal Reserve's large-scale asset purchases (LSAPs) on MBS yields and mortgage rates. The Federal Reserve's accumulation of MBS and Treasury securities lowered MBS yields and mortgage rates by more than what would have been suggested by changes in market expectations alone, suggesting that portfolio rebalancing effects of LSAPs are an important consideration for monetary policy transmission. Our estimates also suggest that the Federal Reserve must hold a substantial market share of agency MBS or of Treasury securities to significantly lower MBS yields and in turn significantly lower mortgage rates."

AUTHORS

S.Wayne Passmore

Diana Hancock

Diana Hancock

PUBLISHED

2014 in FEDS Working Paper

UNRANKED SOURCE

Yes

Yes

3

###### Fed Asset Buying and Private Borrowing Rates

"Past rounds of large-scale asset purchases by the Federal Reserve have lowered yields not onlyon the targeted securities, but also on various private borrowing rates. In particular, yields oncorporate bonds and primary mortgage rates decreased in response to Fed asset purchaseannouncements. Notably, however, the link between rates on mortgage-backed securities andactual mortgage rates has weakened in the wake of the financial crisis."

AUTHOR

Michael D. Bauer

PUBLISHED

2012 in FRBSF Economic Letter

UNRANKED SOURCE

Yes

Yes

Page 1 of 1.

ADDITIONAL STUDIES TO CONSIDER ADDING TO LIST

State of K periodically recommends additional studies to add to this list, both newly published and newly discovered.
There are none for now, but check back another time.

QUESTIONS TO CONSIDER

Does quantitative easing reduce interest rates?

Does money invested 50% in a US stock index fund and 50% in a US bond index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

Does money invested in a US stock index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

Add question

9 studies

Submitted by: VLieu 0

Does money invested 50% in a US stock index fund and 50% in a US bond index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

11 studies

Submitted by: BBlack 104

Does money invested in a US stock index fund have at least a 95% chance of lasting for 30 years at an annual withdrawal rate of 4% (excluding taxes and fees, and with withdrawals adjusted for inflation each year)?

18 studies

Submitted by: KKrista 77

Add question