For Fed, Record Purchase Week of $25B MBS

The Federal Reserve Bank of New York on Thursday announced the purchase of another $24.999 billion in agency mortgage-backed securities for the week ending Feb. 25, officially the largest week in MBS purchases since the program began in early January. The second-largest week of purchases, the week ending Jan. 14, boasted a close runner-up of $23.4 billion in purchases. The running total of MBS bought from Freddie Mac (FRE), Fannie Mae (FNM) and Ginnie Mae topped $159.83 billion, as of Thursday’s announcement. The Fed purchased $8.43 billion from Freddie in the week ending Feb. 25, took a whopping $15.57 billion off Fannie’s books — also marking the largest week of purchases for Fannie — and bought $1 billion in MBS from Ginnie. Purchases from both Freddie and Fannie picked up from the previous week, but Ginnie’s purchases remained at a program-long low, unchanged from last week. So far, the Fed has purchased a total $74.2 billion from Freddie, $71.6 billion from Fannie and $14 billion from Ginnie. In the week ending Feb. 25, the Fed purchased $100 million in coupons with 15-year maturities (specifically, 4 percent coupons), while all other purchases were of coupons with 30-year maturities. The predominant product for the week was the 30-year, 4.5 percent coupon (of which the Feds bought $16.15 billion). This purchase was ruled by Fannie’s $12.25 billion, which pushed the GSE into its single largest week of purchases by the Fed. Of the Fed’s total purchases so far, approximately 95 percent have been purchases of agency coupons with 30-year maturities (43.4 percent of total purchases were 4.5 coupons alone). About 4.5 percent have been purchases of coupons with 15-year maturities, and less than 1 percent has been purchases of coupons with “other” maturities — 20- and 40-year, for example. See details on the Fed’s purchases. Write to Diana Golobay at [email protected]. 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.