Posted by: youngragingbull | March 27, 2013

Word on the Street: Fed’s buying half of MBS issuance

The Federal Reserve is buying about half of the gross issuance of mortgage-backed securities and a quarter of the monthly gross issuance of coupon Treasury securities, according to Simon Potter, executive vice president at the New York Fed.

In a speech to the Forecasters Club of New York, Potter says the MBS purchases are down from about two-thirds from the MBS buys the Fed made in 2009.

Potter said the Fed operations are going smoothly and market liquidity is holding up well.

He also said there’s large uncertainty in primary dealer expectations on the Fed’s portfolio by the end of 2014, with the difference in expectations being around $500 billion.

Source: MW

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