Fed To Begin MBS Purchase Program

The Federal Reserve says it expects to commence operations in early January 2009 under its previously announced program to purchase mortgage-backed securities (MBS) and that it has selected private investment managers to act as its agents in implementing the program.

Under the MBS purchase program, the Federal Reserve will purchase MBS backed by Fannie Mae, Freddie Mac and Ginnie Mae. The program is being established to support the mortgage and housing markets and to foster improved conditions in financial markets more generally, the Fed says.

Bloomberg reports that the Fed has selected BlackRock Inc., Goldman Sachs Asset Management, Pacific Investment Management Co. and Wellington Management Co. to manage the purchases.

SOURCES: Federal Reserve, Bloomberg


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