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Thursday, March 25, 2010

Countdown: Fed MBS Purchase Program

by Calculated Risk on 3/25/2010 03:27:00 PM

One week and $2 billion to go ... (UPDATE: Mortgage News Daily says $6.1 billion left).

So the program is essentially over. We should be watching to see if 10 Year Treasury yields rise - and if mortgages take "a beating".

From the Atlanta Fed weekly Financial Highlights released today (as of last week):

Fed MBS PurchasesClick on graph for larger image in new window.

Graph Source: Altanta Fed.

This graph shows the cumulative MBS purchases by week. From the Atlanta Fed:

  • The Fed purchased a net total of $10 billion of agency-backed MBS through the week of March 17. This purchase brings its total purchases up to $1.24 trillion, and by the end of the first quarter of 2010 the Fed will have purchased $1.25 trillion (thus, it is 99% complete).
  • The NY Fed purchased an additional net $8 billion in MBS for the week ending March 24th. This puts the total purchases at $1.248 trillion or 99.84% complete. Just $2 billion and one more week to go ...

    Note: The Fed's balance sheet shows significant less MBS. As mentioned before, the difference is the NY Fed announces the purchases when they contract to buy; the Federal Reserve places the MBS on the balance sheet when the contract settles. The Fed's balance sheet will probably expand by close to $200 billion over the next two months as the remaining contract settle.