Home / Daily Dose / How the Fed Can Address Mortgage-Backed Securities
Print This Post Print This Post

How the Fed Can Address Mortgage-Backed Securities

According to former Fed governor Randy Kroszner, while the Federal Reserve has taken the right first steps to mitigate the damage caused by the coronavirus, there is still more to be done. In this Video Spotlight, Kroszner discusses with CNBC how reviving programs from 2008 and 2009.

Kroszner also discusses how the Fed bought back mortgage-backed securities a decade ago, and why the Fed's emergency moves will help narrow spreads in mortgage-backed securities.

In addition to the rate cut, the Fed announced that over the coming months that it will increase its holdings of Treasury securities by at least $500 billion and its holdings and agency mortgage-backed securities by at least $200 billion.

The reduction of interest rates to 0% was suspected at the end of last week, as Goldman Sachs economists expected this move, according to The Street.

“In light of the continued growth in coronavirus cases in the U.S. and globally, the sharp further tightening in financial conditions, and rising risks to the economic outlook, we now expect the [Federal Open Market Committee] to cut the funds rate 100 basis points on March 18," Hatzius wrote.

 

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
x

Check Also

DS5: The Mortgage Industry Work-Life Balance

On this episode of DS5: Inside the Industry, Marcia Davies, COO of the Mortgage Bankers Association. Davies discusses how COVID-19 has put a strain on workers’ personal lives, as well as what businesses are doing to cope with this new normal.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.