The Federal Reserve purchased $61.4 billion in mortgage-backed securities from government-sponsored entities Fannie Mae (FNM), Freddie Mac (FRE) and Ginnie Mae in the week ending March 11. The Federal Reserve Bank of New York, in reporting the details of the purchases Thursday, also announced the second weekly batch of coupon sales along with purchases. The Fed said it bought a total $27.1 billion in MBS for the week, net of $34.3 billion in sales “by investment managers as agents for the System Open Market Account (SOMA).” In terms of gross sales, it was a record week for the Fed. It purchased a record $18.7 billion from Fannie, $2.1 billion from Ginnie and a whopping $40.6 billion from Fannie. Thursday’s announcement marked the largest week of purchases from both Fannie and Freddie, squeaking past the $39 billion and $18.65 billion record marks set for the agencies the previous week. The bulk of weekly purchases  continued its recent trend of focusing within 30-year 4.5 coupons, worth a combined $19.8 billion. Two other 30-year coupons, 4s and 5.5s, cost a combined $23.5 billion to the Fed (bought only from Fannie and Freddie; Ginnie participated only in 30-year 4.5s and 6s this week). In the same week, the Fed also sold $10.7 billion in 30-year 5.5 coupons. The second-most popular product for sale in the week was the 30-year 5 coupon at $7 billion in sales. All told, the Fed sold $34.27 billion in the week. See a table of the week’s purchases and sales. The Fed’s assets shrank $13.77 billion in the same week ending March 11, according to a balance sheet summary released Thursday. The data show the Fed’s consolidated balance sheet fell to a value of $1.88 trillion from the previous week, but is up almost $1.01 trillion from the year-ago week ended March 12, 2008. Write to Diana Golobay at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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