How Do the Fed's MBS Holdings Affect the Economy?

Antoine Martin and Sam Schulhofer-Wohl
Additional contact information
Sam Schulhofer-Wohl: https://www.dallasfed.org/fed/leadership/schulhofer-wohl

No 20180808, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In our previous post, we discussed the meaning of the term “credit allocation” and how it relates to the Federal Reserve’s holdings of agency mortgage-backed securities (MBS). We concluded that the Fed’s MBS holdings do not pose significant credit risk but that the Fed does influence the relative market price of credit when it purchases agency MBS, and this indirectly influences decisions by investors. Today, we take the next step and discuss how the Fed’s MBS purchases affect the U.S. economy and, in particular, how the effect of MBS purchases can differ from the effect of purchases of Treasury securities.

Keywords: Federal Reserve; MBS; economy (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Date: 2018-08-08
New Economics Papers: this item is included in nep-mac and nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2018 ... ect-the-economy.html Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:87268

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().