Chase automatically refinances morgages

[Beet]

There is some merit to this idea but it also hits on my pet peeve, namely that security prices move inverse to interest rates, such that if a house can be thought of as a security, then a decrease in interest rates would only result in an increase in housing prices. And housing inflation, housing being 40 percent of household expenditures, is the mammoth in the room of uncounted inflation that is missed by the CPI.

Further, it is regressive, for the rich (like Torie) benefit from it while the young and the poor who one day aspire to own a home, particularly young families already dealing with the burden of the cost of having children, are hurt the most by it. It never ceases to amaze me when conservatives whine about relatively trivial things such as food and fuel inflation, which although they can hurt the pockets of the poor, are small beans compared to inflation in housing. And house price inflation has other harms, too, as we have seen: what goes up can come down, and when or if it does come down, the damage is tremendous.

That's the only thing I don't like about this proposal. 0.5-1% mortgage rates would simply lead to another housing boom, which in turn would force poor, young, household formers (the very people we want to help, both for moral and economic reasons) to take on proportionally more debt.

Of course, one way to address this may be a cap on the price of the home that the Fed will buy the mortgage off of. Perhaps, for instance, homes under a quarter million, the Fed will subsidize fully, those between a quarter million and half million, they will subsidize a little, and those over a half million, none at all. That would still have an inflationary impact, but not as much.