NOW It’s QE4. Bonds Are Responding

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Posted To: MBS Commentary

https://www.newyorkfed.org/markets/opolicy/operating_policy_200312a “As a part of its $60 billion reserve management purchases for the monthly period beginning March 13, 2020 and continuing through April 13, 2020, the Desk will conduct purchases across a range of maturities to roughly match the maturity composition of Treasury securities outstanding. Specifically, the Desk plans to distribute reserve management purchases across eleven sectors, including nominal coupons, bills, Treasury Inflation-Protected Securities, and Floating Rate Notes.” As promised, the Fed is not getting back into MBS. At least not right now, but they ARE getting back into purchasing longer-dated Treasuries to “roughly match” the existing mix of bonds in play. In addition to the $60 bln a month, the Fed is also vastly…(read more)

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