After months of investor uncertainty and occasional hand-wringing, it has begun – the “tapering,” that is. This week, the Federal Reserve announced that it would scale back the growth in its agency MBS portfolio from $40 billion a month to $35 billion a month, starting in January. The central bank said it would continue to reinvest principal payments from its huge agency MBS portfolio, which was up to $1.483 trillion at the last official reading. With new production in the agency MBS market falling dramatically since April, the Fed’s target...