{"id":115614,"date":"2021-06-01T21:09:58","date_gmt":"2021-06-01T21:09:58","guid":{"rendered":"https:\/\/fin2me.com\/?p=115614"},"modified":"2021-06-01T21:09:58","modified_gmt":"2021-06-01T21:09:58","slug":"feds-brainard-says-central-banks-mortgage-purchases-part-of-broader-effort-to-lower-rates","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/feds-brainard-says-central-banks-mortgage-purchases-part-of-broader-effort-to-lower-rates\/","title":{"rendered":"Fed's Brainard says central bank's mortgage purchases part of broader effort to lower rates"},"content":{"rendered":"
FILE PHOTO: Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., March 1, 2017. REUTERS\/Brian Snyder<\/figcaption>

(Reuters) – The Federal Reserve\u2019s purchases of mortgage-backed securities are having the same effect in lowering longer-term rates as its purchases of Treasury securities and are part of a broader effort to support the economy, Fed Governor Lael Brainard said on Tuesday.<\/p>\n

\u201cFrom a monetary accommodation perspective, the effect of purchases of Treasuries and agency MBS is generally the same,\u201d Brainard said during a virtual conversation organized by the Economic Club of New York.<\/p>\n

Asked about whether the central bank should be purchasing mortgage bonds when the housing market is performing strongly, Brainard said the current monthly pace of purchasing $80 billion of Treasury securities and $40 billion of mortgage-backed security is an \u201ceffective\u201d way to hold down rates and provide certainty to markets.<\/p>\n

\u201cThe composition was chosen to provide certainty to markets,\u201d Brainard said. \u201cIt\u2019s effective in the current composition and that is the lens through which we are continuing.\u201d<\/p>\n

The Fed official\u2019s remarks could be a sign that she might not support reducing the central bank\u2019s purchases of mortgage-backed securities at a faster clip than Treasuries when the time comes to start scaling back those asset purchases, said Michael Feroli, chief U.S. economist for JPMorgan.<\/p>\n

\u201cIt sounded a lot like she just didn\u2019t see much payoff to moving first with MBS, in terms of that really doing anything for the housing market,\u201d said Feroli, who moderated the conversation with Brainard.<\/p>\n

Brainard said the Fed should remain \u201csteady\u201d in its support as the economy reopens and works through temporary mismatches between supply and demand.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

FILE PHOTO: Federal Reserve Board Governor Lael Brainard speaks at the John F. 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