The Federal Open Market Committeesaid the central bank plans to continue purchasing agency mortgage-backed securities to nuture the housing recovery while attempting to keep unemployment rates down. 

The FOMC made that conclusion after members met this week and announced on Wednesday that the Federal Reserve would continue purchasing agency MBS at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion a month.

However, the committee is set to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the macroeconomic landscape gains momentum.

Information received since the FOMC met in May suggested that economic activity expanded at a moderate pace. Even though labor market conditions posted further improvement, the unemployment rate remains elevated.

“The committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction,” FOMC members stated. 

They added, “Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”

The vote for the statement was 10-to-2 with two dissenting votes, according to analysts for Econoday.

On May 22, the FOMC minutes revealed that a number of participants expressed a willingness to begin reducing its bond-buying program by June as long as the underlying economic data supports such a decision.

However, members of the FOMC disagreed about how much the economy would have to improve and what evidence would be necessary for the likelihood of that outcome, according to the May minutes.


Most Popular Articles

Fannie Mae, Freddie Mac watchdog prepping for "massive IPO"

The watchdog for Fannie Mae and Freddie Mac is interviewing Wall Street firms to handle a public offering that would dwarf any IPO in history, Fox says.

Dec 09, 2019 By

Latest Articles

Here are the cities where iBuyers are taking hold

With companies like Opendoor, Zillow and Redfin, homebuyers and sellers were no longer limited to the traditional method when they decided to buy and sell their homes. But just how much of an impact are those iBuyers having on the market itself?

Dec 11, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please