Atlanta Fed On Federal Reserve Monetization Activities; $1.1 Trillion In USTs And Agency MBS Purchased To Date

The Fed now has $15 billion in purchasing power left under the Treasury component of QE. Of the $1,250 billion in MBS projected to be bought by the end of the year, the Fed was already purchased $840 billion, leaving $410 billion in budgeted purchases over the next three and a half months: about $125 billion per month.

• On September 15, the Fed purchased $2.05 billion in Treasuries, roughly in the 10-17 year sector; on September 16, it purchased $1.799 billion in the one-to-two year sector. It has purchased a total of $285.2 billion of Treasury securities through September 16.
• The Fed plans to purchase $300 billion by the end of October, or about six weeks from now, which makes for a pace of about $2.5 billion in purchases per week.
• The Fed has purchased a net total of $18.8 billion of agency MBS between September 3 and 9. It bought $3.6 billion of Freddie Mac, $12.4 billion of Fannie Mae, and $2.9 billion of Ginnie Mae.
• The Fed’s cumulative MBS purchases have reached $840.1 billion, and it has announced plans to purchase up to $1.25 trillion by the end of the year.

Comments

[Anonymous]

How many more treasury bills/bonds/notes is treasury scheduled to issue in the coming months. If the treasury is not going to issue any more debt, then it should be OK if Fed is not there to monetize it. On the other hand, we would have to see if indirect bidders to would step up to buy US debt at the same interest rates without the helping hand of FED

[Anonymous]

The TBAC Recommended Financing Tables can be found at

http://www.treas.gov/press/releases/tg255.htm

[Virginian]

Plenty of auctions to come.  None will fail - but we'll have death by a trillion papercuts.  The music will eventually stop....

[Rollerball]

Vote to end the Fed:

http://www.cnbc.com/id/32881898

[trx]

Thanks for another important piece of information and documetation :-) Just wondering: is it possible to find out who these indirect bidders are? Won't these Treasuries show up on someones balanse sheet, at some point? Is so; where would you look first, Tylor?

Perhaps a stupid question, but I can assure you that it won't be the last....

Greetings !

trx

[McGriffen]

Any analysis / thoughts on the projected roll-down from the Agency MBS purchase program?  By roll-down, monthly P&I payments; the "P" would reduce outstanding principal on the MBS holdings...not by much, most likely, but on a book that large 12 months' worth would be, well, a lot.

P = principal payments (scheduled, curtailments)

[Anonymous]

Dumb question: who picks up the tab when the MBS turn out to be worth 10% of what the FED paid for them?

[SWRichmond]

Look at the name you write on your 1040.

[Anonymous]

Has anybody asked what happens to our funding needs when the Treasury stops buying?? Is that when the swine flu kicks in?