Federal Reserve MBS Purchases on Hold at 16 Billion

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS).

In the five trading days between December 3 and December 9, the Federal Reserve purchased a total of $27.25 billion agency MBS. In those five days the Federal Reserve sold $11.25 billion agency MBS, most of which were Fannie 5.0 coupons (dollar rolls). The Fed’s weekly net purchase total was $16.00 billion. This is the fourth consecutive week purchases have come in at $16.00 billion.

The goal of the Federal Reserve’s agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.

Since the inception of the program in January 2009, the Fed has spent $1.07 trillion in the agency MBS market, or 85.65 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.