Prices on 30-year Fannie Mae 4% coupon mortgage-backed securities jumped 58 basis points moments after the Federal Reserve announced it would be reinvesting incoming principal from previously purchased agency MBS to buy more. Prices actually dipped from the moment Fed was scheduled to release the announcement to the time the report was actually distributed, roughly 15 minutes. According to CNBC, the delay was because the copier in the press room at the central bank was jammed. Jim Vogel of FTN Financial said the initial spike in pricing could have been higher. “The volume spike in 30-year trading was not as much as we would have anticipated, even though our original thoughts on the Twist leaned toward more buying in 30s than previous programs,” Vogel said. Analysts at JPMorgan Chase (JPM) said the FOMC announcement “significantly changes the mortgage supply and demand landscape.” They originally estimated a $215 billion runoff in the Fed MBS portfolio in 2012. Taking into account paydowns of agency debt, new demand for MBS went to $225 billion, roughly $75 billion more than supply side. The Fed announced plans to buy another $400 billion in longer-term Treasury securities and sell an equal amount of holdings that mature in three months to three years. “We had thought the Fed would announce a swap worth about $300 billion,” said Paul Ashworth, senior U.S. economist at Capital Economics. Accounting for the new MBS purchases, Ashworth estimates the Fed will be purchasing roughly $15 billion fewer Treasury securities per month. With the so-called Operation Twist lasting over the next nine months, the net impact on longer-term Treasurys will be a bit smaller than the $300 billion Capital Economics expected. The overall size of the Twist fell short of what markets expected, according to Vogel. “Stocks are expressing disappointment both with the overall size — under the $500 billion traders talked themselves into as last week was ending — and the nine-month investment schedule,” Vogel said. Considering previous actions taken by the Fed did not spur the economy enough to recover – in fact, another recession is growing ever more likely – most analysts expect Wednesday’s decision to have little impact. “The big question is whether this latest action will accomplish anything? We doubt it,” Ashworth said. “The cost of borrowing simply isn’t the problem. Businesses don’t have the confidence to invest and half of all mortgage borrowers don’t have the home equity needed to refinance at lower rates.” Write to Jon Prior. Follow him on Twitter @JonAPrior