The Federal Reserve wants consumers to apply for more mortgages and businesses to take out more loans, in order to boost the sluggish U.S. economy.
At least, that's the thinking behind Operation Twist, a policy announced by the Fed Wednesday that's meant to drive down long-term interest rates, thereby making it cheaper to borrow.
But will it really work? Industry experts have their reservations."Interest rates will come down, but the effect won't be what the Fed has envisioned," said Mike Fratantoni, vice president of research for the Mortgage Bankers Association.
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