Average Quote by Franklin Raines
“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.”
About This Quote
Source Speech: Financial Forum, 2008
Liquidity injections affect short‑term rates, but long‑term mortgage rates hinge on inflation expectations.
In simple terms: Mortgage rates follow inflation expectations more than liquidity.
Key Takeaway
Watch inflation expectations to gauge mortgage rates.
Themes
finance
inflation
interest rates
market dynamics
Mood
analytical
cautious
Type
economic
educational
When to use this quote
- home buying
- mortgage refinancing
- investment planning
- policy analysis
Key Concepts
monetary policy
expectations theory
rate setting
Questions to Reflect On
- How do you assess market inflation expectations?
- What indicators signal changing inflation outlook?
A Different Perspective
If inflation expectations are wrong, rates may misalign with actual inflation.
