ALERT: Emergency Rate Cut; QE4 Officially Here, Including $200bln MBS

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Posted To: MBS Commentary

Fed Funds Rate now 0-0.25% (matches record low) $500 bln in new Treasury purchases + 100% reinvestments $200 bln in new MBS purchases + 100% reinvestments 1st month of MBS QE + reinvestments to equal $80bln Pace will be adjusted as appropriate Operational Details: https://www.newyorkfed.org/markets/opolicy/operating_policy_200315 Announcement: https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm Is this big news? Yes Is it unexpected? No. Well, it wasn’t necessarily expected on Sunday, but it was definitely expected by the Fed meeting this Wednesday. They were also increasingly expected to include MBS in that QE. I wasn’t convinced this was necessary and now we’ll never know if it was. But considering the current pace of origination, this is a very small token (the…(read more)

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