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Franklin Raines
American
January 14, 1949
Businessman
Well, you know, we've got a lot of stimulus in the economy already from the tax cut, from the lowered interest rates, and also from the refinancing of mortgages.
Franklin Raines
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And so we have to be careful with looking at additional stimulus that we don't provoke an increase in the bond rate and then offset a lot of the stimulus we've already got.
Franklin Raines
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They flooded liquidity in the marketplace but the mortgage rate is based much more on expectations of inflation. So if the average investor believes that there is inflation coming, they'll move that rate up.
Franklin Raines
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Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.
Franklin Raines
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I think if you go beyond a year - if this continues into the system in the out years, I think there is a risk and that - that we could have a negative reaction in the bond market and that will offset the good that was attempted to be done.
Franklin Raines
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