The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the holiday shortened work week between December 31, 2009 and January 6, 2010, the Federal Reserve purchased $14.50 billion agency MBS. In those four days the Federal Reserve sold $2.50 billion (supported the roll market) for a net total of $12 billion purchases.

The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.

Since the inception of the program in January 2009, the Fed has spent $1.122 trillion in the agency MBS market, or 89.8 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010. (READ MORE ON TALK OF THE PROGRAM'S EXTENSION)

Of the net $12.00 billion purchases made in the week ending January 6, 2010:

  • $5.90 billion was used to buy 30 year 4.5 MBS coupons. 49 percent of total weekly purchases
  • $5.48 billion was used to buy 30 year 5.0 MBS coupons. 46 percent of total weekly purchases
  • $375 million was used to buy  30 year 6.0 MBS coupons. 3 percent of total weekly purchases
  • $250  million was used to buy 15 year 4.5 MBS coupons. 2 percent of total weekly purchases

85 percent of the mortgage-backs purchased were Fannie Mae MBS, 15 percent were Freddie Mac coupons, no Ginnie Mae coupons were bought.

The Fed's daily purchase average was $3.00 billion per day, an increase from last week's daily average of $2.33 billion per day.

Below is a chart illustrating the evolution of the Federal Reserve's Agency MBS Purchase Program.