Archive for Federal Reserve
Treasury to Sell MBS Holdings. Minimal Shock Expected
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Today, the U.S. Department of the Treasury announced that it will begin the orderly wind down of its remaining portfolio of $142 billion in agency-guaranteed mortgage-backed securities (MBS). Excerpts from the Presser… Starting this month,Treasury plans to sell up to $10 billion in agency-guaranteed MBS per month, subject to market conditions. At the end of each month, Treasury will post on its website the total agency-guaranteed MBS sales it has made, broken down by coupon and agency. “We’re continuing to wind down the emergency programs that were put in place in 2008 and 2009 to help restore market stability, and the sale of these securities is consistent with that effort,” said Mary J. Miller, Assistant Secretary for Financial Markets. “We will exit this investment…(read more)
FOMC Offers Hesitant Optimism. Upgraded Outlook Overall
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The Federal Reserve Open Market Committee has released the March FOMC Statement . On the whole the Fed hinted at an upgrade in economic conditions. Saying the information received since January “suggests” the economic recovery is on “firmer footing”. The labor market also “appears” to be “improving gradually”. Household spending and business investment continue to “expand”. On inflation, the Board acknowledged rising food and energy prices but said it anticipates the effects to be “transitory” or temporary. Longer-term inflation expectations are stable. The Fed made no mention of the crisis in Japan or conflict in Northern Africa/The Middle East. The QEII bond purchasing program is expected to continue as planned before ending in June. No voters dissented the decision. Plain and Simple : Although…(read more)
Fed Sees Lagging Labor Market Recovery. Cuts Inflation Forecast. Is More QE Coming?
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The Thanksgiving slowdown prevented me from posting the Federal Reserve’s updated economic forecast. The Fed’s Summary of Economic Projections are released once a quarter. They are attached to the minutes of four of the Committee’s FOMC meetings and are intended to convey information about FOMC participants’ assessments of their statutory economic targets. Projections are provided for output growth, unemployment, and inflation for the years 2010 to 2013 and over the longer run. They are based on information available through the end of the meeting and on each participant’s assumptions about factors likely to affect economic outcomes, including his or her assessment of appropriate monetary policy. Longer-run projections represent each participant’s assessment of the rate…(read more)