US Fed purchases $1.9 billion of mortgage bonds, sells none


by   |  VIEW 590
US Fed purchases $1.9 billion of mortgage bonds, sells none

Later last week, the US Federal Reserve had purchased $1.876 billion of MBS or agency mortgage-backed securities, but sold none. In a statement released later last week, the New York Federal Reserve Bank said during the week that ended on January 8th, the US Federal Reserve had purchased $1.876 billion worth of MBS, an asset of FNMA (Federal National Mortgage Association) or Fannie Mac, which was formed back in the 1938’s great financial depression and introduced in to the public trading in 1968 in a bid to securitize mortgage loans that in effect could allow more flexibility in to the mortgage market and reduce both mortgage lenders’ and Central Bank’s reliance on conventional savings and loan associations.

In point of fact, since October 2011, shortly after the great financial depression between 2007 and 2009, US Central Bank had begun repurchasing of mortgage backed securities or mortgage bonds (MBS) in a bid to ramp up the prices of securitized agency debts which had hit a rock-bottom back in the 2007s, at the beginning of the financial depression, but had botched to revive later and had still been trading at their decade-lows amid a multi-year low interest rate following three rate cuts last year.