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Mortgage Investors Don’t Think Fed’s Exit Means Goodbye Forever

  • Policymakers ‘crossed the Rubicon’ and aren’t going back: FTN
  • Fed promised in June 2017 QE would be there again if needed
Homes in Illinois

Photographer: Daniel Acker/Bloomberg

Mortgage investors are taking the coming end of the Federal Reserve’s mortgage-backed securities purchases calmly for good reason. They don’t believe it’s gone forever.

“Once the Fed crossed the Rubicon into QE, they are never going to go back,” according to Walt Schmidt, head of MBS research at FTN Financial, whose advisory group has $17 billion in agency mortgage-backed securities and collateralized mortgage obligations under management.