So for you financial folks, does this mean we can expect to see another round of mortgage rate reductions?
Can I have 1% of the 600 Billion?
Just the opposite. That is the price of a 30-year bond. When the price goes down the interest rate goes up and vice versa. Chairman Ben "Weimar" Bernanke's magical money machine will cause medium and long term interest rates to go up because bankers around the world realize that dollars in the future won't be worth as much as they are now. Short term rates are controlled directly by the fed, thus no longer have any connection to economic reality.
Mortage rates are tied to the 10 year bond, not the 30. A 30 year fixed mortgage has lately been about 1.875% higher than the yield on the 10 year bond. I’ve seen spreads as low as 1.4% during the boom, and 2.2% during the crisis.
Example:
10 year bond: 2.50%
30 yr rate: 4.375%