Finally, the Federal Reserve has begun making substantial purchases of longer-term securities in order to support market functioning and reduce interest rates in the mortgage and private credit markets. As recently as our March meeting, the FOMC increased the total planned amount of purchases of agency-guaranteed mortgage-backed securities and initiated a program of buying longer-term Treasury securities.
3 I believe these efforts have been somewhat successful at addressing the "tightening in financial conditions" side of the adverse feedback loop. Short-term interest rates are much lower than they were when the crisis began, and so are mortgage rates – at least those on mortgages eligible to be guaranteed by Fannie Mae and Freddie Mac.