Fed May Buy More Mortgage Bonds on Weak Jobs, Banks Say

The Federal Reserve is more likely to buy additional government-backed mortgage securities after the pace of U.S. job creation slowed, underscoring the economy’s fragility, according to Morgan Stanley and JPMorgan Chase & Co.

Analysts at the banks joined researchers at Bank of America Corp., Barclays Plc and Nomura Securities International in saying the odds are greater that Fed will add to its current program of reinvesting in the $5.4 trillion market with proceeds from past buying in reports published June 1. That day, benchmark Treasury yields fell to record lows after data showed the U.S. added 69,000 jobs in May, the fewest in a year and less than the most-pessimistic forecast in a Bloomberg News survey.