Friday, September 2, 2022

Atlanta Fed Head Raphael Bostic On Mortgage Backed Securities: "We are going to have to actively try to sell them."

 From Bloomberg via Yahoo Finance, September 1:

Federal Reserve Bank of Atlanta President Raphael Bostic said the US central bank’s campaign to cool inflation was still not complete....
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....Bostic also discussed Fed efforts to shrink its $8.8 trillion balance sheet by allowing the runoff of its holdings of Treasuries and mortgage-backed securities as they mature. That monthly pace doubles to $95 billion in September, or roughly $1 trillion a year.

He noted that because MBS mature more slowly, the process would increase the concentration of these securities in the Fed’s holdings.

“We have got to think about how you reduce mortgages,” he said, adding the central bank would actively discuss its options. “We can’t just rely on maturation of these securities. We are going to have to actively try to sell them.”

(Updates with Bostic comment on MBS in final three paragraphs.)

In other housing news:

From MortgageNewsDaily, September 1, "Mortgage Rates Jump Back Above 6%; More Volatility Ahead"

And:


Good night Wall Street. One of our theme songs, Israel Kamakawiwo'ole - Somewhere Over The Rainbow 
(it ends with the scattering of his ashes): 
 
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