Fed Purchases Another $16Bn of Agency MBS
The Federal Reserve Bank of New York bought another $16bn of agency mortgage-backed securities (MBS) in the week ending December 9. The Fed's gross weekly purchases totaled $27.25bn -- $6.6bn from Freddie Mac (FRE), $19.15bn from Fannie Mae (FNM) and $1.5bn from Ginnie Mae, according to details published by the New York Federal Reserve. The gross purchases did not account for $11.25bn of MBS sold in the same week -- $1.75bn of Freddie and $9.5bn of Fannie MBS. The NY Fed said it will in coming weeks test an exit strategy from its portfolio of more than $1trn of agency MBS. The tests, which come in advance of any decision by the Federal Open Market Committee to begin the exit process, will employ triparty reverse repurchase agreements. These are typically overnight sell and buyback deals with set interest rates, the term triparty references the presence of a third party arbitrator. Write to Diana Golobay.