The Fed and commercial banks purchased a combined $1 trillion in agency MBS over the past 12 months, more than 145% of the net supply. (Includes data chart.)
In September, the FSOC endorsed the FHFA’s capital rule, even urging the agency to use tougher, more bank-like standards. What the report didn’t say was how the council reached its conclusions.
The council said any distress that affects the secondary mortgage market activities of the GSEs “could pose a risk to financial stability if those risks are not properly mitigated.”
The Federal Reserve Bank of New York will have likely added nearly $1.5 trillion of MBS to the System Open Markets Account by January, and the Fed will once again own more than a third of all agency product.
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