Fed’s MBS Purchases Reach $115 Billion

The Federal Reserve Bank of New York on Thursday announced it had purchased another whopping $23.2 billion of agency mortgage-backed securities for the week ending Feb. 11, bringing total purchases so far to $114.96 billion. The weekly purchase announcements are second only to the second week in January — Jan. 8 to Jan. 14 — when total agency MBS purchases for the week came to $23.4 billion. The Fed purchased nearly $14.7 billion from Freddie Mac (FRE), the most purchased from that government-sponsored entity (GSE) since $15.8 billion was bought off its books in the week ending Jan. 14. The Fed reported another $7.2 billion bought from Fannie Mae (FNM) and $1.4 billion from Ginnie Mae — the smallest weekly purchase from Ginnie since the first week of purchases, Jan. 5 to Jan. 7, when the Fed bought $450 million from the agency. The week’s purchases mean the Fed has taken a total $57.9 billion off Freddie’s hands, $45.06 billion from Fannie’s books and $12 billion from Ginnie. In the week ending Feb. 11, the Fed purchased only $200 million in agency coupons with 15-year maturities. The rest of its purchases occurred in maturities with 30-year and other maturities. Of the Fed’s total purchases so far, approximately 94 percent have been purchases of agency coupons with 30-year maturities. About 5 percent have been purchases of coupons with 15-year maturities, and just under 1 percent has consisted of purchases of coupons with other maturities — 20- and 40-year maturities, for example. The Federal Reserve in early February announced it had selected JP Morgan Chase & Co. (JPM) as custodian for the program, which began on Jan. 5 and will purchase up to $500 billion in MBS that are backed by government-sponsored entities, in an effort to maintain liquidity in a vital section of the U.S. mortgage market. The Fed has also said it may soon begin modifying mortgages it owns within the assets it owns. Write to Diana Golobay at diana.golobay@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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