Mortgage Investors Can Take Heart With Fed Buying ‘Here to Stay’
- Bank’s holdings of agency MBS universe below previous highs
- Housing finance has been helped but home building moribund
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Mortgage investors can take heart knowing the Federal Reserve considers agency MBS a primary arena through which to conduct monetary policy.
The central bank has purchased agency mortgage bonds at a record pace totaling $719 billion -- just over $12 billion a day on average -- according to data from the New York Fed. While the amount of buying over such a short time frame has been surprising, the banks re-entry into the MBS market was not.