Ok, did some reading.
The reserves are set by some really complex formula that figures out how many dollars they have to keep in reserve for how many dollars they have in loans. Several years ago they go in trouble with some CEO salary scandal stuff and the government came in and said, “we don’t like the result of the formula, we’re going to make you keep 130% of that number in reserve in case we find more fraud”. All they’ve done today is moved that down to 120%, so anyone who thinks this is going to let them give out more loans than they can afford is full of it.
This will free up 200 billion dollars. Banks will sell 200 billion dollars of their good mortgages to freddie/fannie which will free up 200 billion to loan out to people with good credit looking to buy a home in this buyers market. There are reports right now of people with great credit being turned down simply because the bank don’t have the money to lend. This should help with that.
And unlike rate cuts this shouldn’t hurt the dollar.
All in all, big :tup: from me.