Today we have invited Mitch Ludwig with Coastline Mortgage to explain the connection between the Federal Reserve, the mortgage rates and the primary and secondary markets.

The Fed is a US government entity that performs two main functions: it holds the government’s foreign currency reserves and manages a variety of bank regulations. The Fed influences financial markets via what is known as the discount rate, which leads to an “open upper bound” for mortgage rates by influencing investors to purchase lower-yielding assets over Treasuries.

Typically, the Federal Reserve does not set the secondary market rates directly. Rather, these are based on a number of factors including other risk-free rates such as certificates of deposit and Treasury bills. However, if the demand side in this equation changes, then the Federal Reserve could ultimately influence the mortgage rate.

Mitch Ludwig
Senior Mortgage Consultant
Coastline Mortgage Consultants, LLC
215 Racine Dr. Ste. 105 Wilmington NC 28403
Cell Phone: 910-231-8044
Work Phone: 910-509-1561
Work Fax: 910-509-9712
Work Email:

About Nolan Formalarie

Nolan Formalarie has been in the North Carolina Real Estate Industry for over 8 years and enjoys every minute of it. He is involved in every aspect of the industry including selling and purchasing residential property, home watch services, property management, association management and construction.