Fed Funds

are effectively at zero right now, so over the past couple of weeks Bernanke has effectively abandoned the Fed Funds as a tool to stimulate the economy.

Mortgage rates are set via bond rates, so their new strategy has shifted to purchasing bonds on the open market to push those rates down, and they are being sucessful at it.

Namely, a very valid argument could be made right now that real estate prices are somewhat undervalued.

JK