FAST FIVE: Fed To Continue "At Least" $120BN In Monthly QE To "Support Flow Of Credit To Households"

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Fed To Continue “At Least” $120BN In Monthly QE To “Support Flow Of Credit To Households” Tyler Durden Wed, 09/16/2020 – 14:29 In its statement the FOMC justified the ongoing (really now endless) QE by stating that “over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.” In other words, the noble Fed is doing QE for the kids not to keep stocks levitating.

Consistent with this directive, the Desk plans to continue to increase SOMA holdings of Treasury securities by approximately $80 billion per month.  Treasury purchases will continue to be conducted across a range of maturities and security types.  The Desk will continue to roll over at auction all principal payments from SOMA holdings of maturing Treasury securities.

Information on purchase amounts and schedules can be found on the Treasury Securities Operational Details page.

Similarly, the Desk plans to continue to increase SOMA holdings of agency MBS by approximately $40 billion per month.  Agency MBS purchases will continue to generally be concentrated in recently produced coupons in 30-year and 15-year fixed rate agency MBS in the To-Be-Announced market.  The Desk will continue to reinvest principal payments from agency MBS and agency debt in agency MBS.

Total monthly purchase amounts can be found on the Agency MBS Historical Operational Results and Planned Purchase Amounts page and operational schedules can be found on the Agency MBS Operation Schedule page.

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