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What's New: I've updated the charts through Thursday's close. The S&P 500 is struggling just below its interim high set four sessions ago. The index is now up 16.11% for 2012, up 115.8% above the March 2009 closing low and 6.7% below the nominal all-time high of October 2007. While the equities markets are still mulling over QE3, the latest Freddie Mac update shows the 30-year fixed has dropped six basis points to 3.49%, tying the historic low first set on July 26. Would this have happened without the new round of easing focused on mortgaged-backed securities?

Here is a snapshot of selected yields and the 30-year fixed mortgage one week after the Fed announced its latest round of Quantitative Easing.

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The 30-year fixed mortgage at the current level no doubt suits the Fed just fine, and the low yields have certainly reduced the pain of Uncle Sam's interest payments on Treasuries (although the yields are up from their recent historic lows). But, as for loans to small businesses, the Fed strategy appears to be a solution to a non-problem. Here's a snippet from a recent NFIB Small Business Economic Trends report:

There were no interesting developments in credit markets. Seven (7) percent of the owners reported that all their credit needs were not met (unchanged), 31% reported all credit needs met, and 53% explicitly said they did not want a loan (62% including those who did not answer the question, presumably uninterested in borrowing as well).

A Perspective on Yields Since 2007

The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (NYSEARCA:FFR) since 2007. The source for the yields is the Daily Treasury Yield Curve Rates from the U.S. Department of the Treasury and the New York Fed's website for the FFR.

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Now let's see the 10-year against the S&P 500 with some notes on Fed intervention.

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For a long-term view of weekly Treasury yields, also focusing on the 10-year, see my Treasury Yields in Perspective.

Source: Treasury Yields/Mortgage Update: 30-Year Fixed Drops To 3.49%