Fed's Weekly MBS Purchases, Sales Slow
The Federal Reserve Bank of New York said late Thursday it had purchased another $28.2 billion in agency mortgage-backed securities this week from government-sponsored entities Freddie Mac (FRE), Fannie Mae (FNM) and Ginnie Mae. For the week ending March 18, the Fed purchased, net of $8.5 billion in coupon sales, $19.7 billion in coupons after a booming week ending March 11, during which the Fed had purchased $61.4 billion total, or $27.1 billion net of sales. The Fed bought $13.14 billion from Freddie's books, $11.65 billion from Fannie and $3.4 billion off of Ginnie's books this week. It was the second-largest week of purchases for Ginnie, coming in behind the $4.3 billion bought from the agency in the week ending Jan. 28. Thirty-year, 4.5 coupons were the most popular item purchased at $12.6 billion from all agencies in the week, followed by 30-year 4s at $6.9 billion. Meanwhile the Fed also sold $695 million worth of Freddie's coupons, $6.5 billion in Fannie's coupons and $1.4 billion in Ginnie's coupons; it was the third consecutive week of listed sales. All told, the Fed's purchased have grossed $308.4 billion so far, but net of sales that figure drops to $299.9 billion. See a detailed table of the current week's purchases and sales. The Federal Reserve’s assets gained $163.74 billion in the same week ending March 18, according to a balance sheet summary released Thursday. The data show the Fed’s consolidated balance sheet grew to a value of $2.04 trillion from the previous week, and is up more than $1.16 trillion from the year-ago week ended March 19, 2008. The Fed's balance sheet had been shrinking considerably in recent weeks. Then, on Wednesday, the Federal Open Market Committee released a statement announcing it had decided to increase the Fed's balance sheet in an attempt to "provide greater support to mortgage lending and housing markets...." The FOMC said it would increase the Fed's purchases of agency MBS by $750 billion, to $1.25 trillion this year. It also announced it would increase the Fed's commitment to purchase agency debt by $100 billion, to a total of up to $200 billion. Write to Diana Golobay at firstname.lastname@example.org. 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.