Fed Operation Twist passes $25 billion in MBS buys
The Federal Reserve Bank of New York purchased $5.5 billion in mortgage-backed securities guaranteed by the government for the week ending Nov. 9. Since Oct. 3, when the Fed began reinvesting capital from its previous MBS purchases, it has acquired $25.5 billion in Fannie Mae, Freddie Mac and Ginnie Mae securities. Along with the MBS purchases, the Fed began buying up $400 billion in long-term Treasury bonds as part of what is commonly referred to as "Operation Twist." The effort is meant to keep borrowing costs down for consumers. So far, it's worked to some degree. The average interest rate on the 30-year fixed-rate mortgage dropped below 4% again last week. In the latest round of MBS purchases, the Fed acquired nearly $1 billion fewer than the week before. It bought $3 billion worth of Fannie-guaranteed MBS; $2.2 billion in Freddie MBS; and $300 million in Ginnie securities. Write to Jon Prior. Follow him on Twitter @JonAPrior.