Treasury Considering Whether to Continue MBS Purchases

The Treasury Department has purchased over $200 billion in Fannie Mae and Freddie Mac mortgage-backed securities to support the mortgage market, but now it has to decide if will continue that support. "We expect to provide guidance by the end of the year," Treasury spokeswoman Meg Reilly said. Treasury began the MBS purchase program after the two government-sponsored enterprises were placed in conservatorships in September 2008. At the time, Treasury said it would terminate the MBS purchase program by the end of 2009. During the summer, Treasury reduced its MBS purchases and it is currently buying about $10 billion a month. The Federal Reserve is slowing its $1.25 trillion agency MBS purchase program at the same time and plans to end the program by March 31.