The Federal Reserve Bank of New York in the week ending February 17 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 $11.3bn in mortgage-backed securities (MBS) – $4.47bn Freddie Mac (FRE) MBS, $3.97bn Fannie Mae (FNM) MBS and $2.85bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $300m of MBS in the same week, bringing the net purchases to $11bn, the same as last week. This week’s MBS buys bring net Fed purchases to date to more than $1.19trn, or nearly 96% of the Fed’s $1.25trn buying power, according to weekly commentary by JP Morgan Securities. The Federal Reserve announced following its January meeting that the purchase program is on track for completion by the end of Q110. Although Federal Open Market Committee (FOMC) members in January unanimously agreed on the need to shrink the Fed’s reserves, division remains over how and when to dispose of mortgage assets as the voices of concern on impending inflation are rising to a chorus. 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. Federal Housing Finance Agency (FHFA) acting director Edward DeMarco on Thursday indicated private demand will return in the wake of the Fed’s exit. “I also expect that other private parties will begin to invest in new Enterprise mortgage-backed securities as the Federal Reserve gradually withdraws its purchase activity,” he said in a speech to Women in Housing and Finance Public Policy Luncheon Thursday (download the speech here). HousingWire managing director Jacob Gaffney in his weekly column explores the return of the buy-to-hold investor. Write to Diana Golobay. Disclosure: The author holds no relevant investment positions.