Some at Fed See a Need to Do More for Housing

The Federal Reserve’s minutes from the Federal Open Market Committee’s mid-December meeting show that if the modest pace of economic growth slows or mortgage markets significantly deteriorate, “a few members” of the committee believe that “more policy stimulus” may be desirable. The Fed has been buying $1.25 trillion of mortgage-backed assets to ease lending markets and keep longer-term rates low — a program that is winding down and scheduled to end by March 31. The program was successful for much of last year, pushing mortgage rates below 5%, to levels not seen since the early 1950s. Many economists say the end of the program will push rates back up from a half point to a full point, adding to the cost of a house and diminishing the pool of buyers. The president of the Federal Reserve Bank of St. Louis, James Bullard, said in late November that the Fed should continue purchasing the securities. “I have advocated to keep the asset-purchase program open but at a very low level, and wait and see what happens,” he told Down Jones Newswires. (

New York Times (1/7/10); David Streitfeld and Jack Healy