The Federal Reserve Bank of New York in the week ending February 3rd continued to buy mortgage assets from government-sponsored entities as the program winds-down to a close by the end of the quarter.
The Fed bought a total of $17.6bn in mortgage-backed securities (MBS) – $5.6bn Freddie Mac (FRE: 0.00 N/A) MBS, $9.3bn Fannie Mae (FNM: 0.00 N/A) MBS and $2.7bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $5.6bn of MBS in the same week, bringing the net purchases to $12bn, the same as last week.
This week’s MBS buys bring net Fed purchases to date to $1.17trn, or nearly 94% of the Fed’s $1.25trn buying power, according to weekly commentary by JP Morgan Securities.
Details of the week’s purchases come a day after the Federal Reserve announced following its January meeting that the purchase program is on track for completion by the end of Q110. The Fed has considered extending and expanding asset-purchase programs, including the MBS program, if its exit this quarter is not replaced with private investor demand, causing MBS spreads to treasuries to blow out again.
Write to Diana Golobay.
Disclosure: The author holds no relevant investment positions.
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