Fed to Continue Supporting Agency MBS Buys

The Federal Reserve said it would continue to support mortgage lending and the housing markets by purchasing agency mortgage-backed securities after concluding a two-day meeting of its Federal Open Market Committee. The FOMC members renewed the Fed's commitment to purchase up to $1.25 trillion in MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae by the end of this year. The Fed has purchased $721.2 billion in agency MBS since last December. "Although economic activity is likely to remain weak for a time, the committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in the context of price stability," according to a FOMC statement. The Federal Reserve also renewed its commitment to purchase $200 billion in Fannie, Freddie and Federal Home Loan Bank debt by yearend. It has already purchased $107.3 billion in agency debt.