The ""New York Federal Reserve Bank"":http://www.newyorkfed.org/index.html purchased $32.9 billion in mortgage-backed securities (MBS) from government agencies this week. Total ""MBS purchases"":http://www.newyorkfed.org/markets/mbs/ since the Fed program began in early January now stands at $303 billion.
The U.S. central bank recently announced an aggressive move to buy up more debt in support of mortgage lending and housing markets. Federal Reserve officials said they are increasing MBS purchases to a total of $1.25 trillion for the year, from the previous commitment of $500 billion.
The Fed also said it will double its purchases of debt from Fannie Mae and Freddie Mac this year, bringing total debt purchases to $200 billion. This week, the Federal Reserve bought $2.672 in ""direct obligations"":http://www.newyorkfed.org/markets/pomo/display/index.cfmxopertype=agny from the GSEs. So far, it has purchased just over $50 billion outright agency securities.
The central banks' expanded debt purchases are expected to continue to drive down mortgage rates, which are sitting at record-low levels now, and should keep them low through the remainder of 2009. Analysts and housing officials argue that this will be a critical factor to absorb the inventory-surplus of unsold and foreclosed homes on the market.
The gross amount of the Federal Reserve's MBS purchases this week totaled $68.5 billion. The Fed bought $51.5 billion in mortgage securities from Fannie Mae, $15.4 billion from Freddie Mac, and $1.6 billion from Ginnie Mae.