Factbox: What the twisting Fed plans to buy and sell

Wed Sep 21, 2011 3:41pm EDT

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(Reuters) - The U.S. central bank is launching a program that will tilt its $2.85 trillion balance sheet more heavily toward longer-term securities, in an effort to boost a fragile economic recovery.

The Federal Reserve said on Wednesday it plans to buy $400 billion in Treasuries with remaining maturities of 6 to 30 years by June 2012, and sell an equal amount of Treasuries with maturities of 3 years and less.

The Fed will also reinvest principal payments from its agency debt and agency mortgage-backed securities holdings into agency MBS starting October 3.

The following is how much, and where, the Fed plans to buy -- though it notes this could change depending on market conditions:

* 32 percent of six to eight year maturity range

* 32 percent of eight to 10 year maturity range

* Four percent of 10 to 20 year maturity range

* 29 percent of 20-30 year maturity range

* Three percent of TIPS (6-30 years)

At the same time, the Fed plans to sell roughly three quarters of its holdings of Treasury securities with remaining maturities between 3 months and 3 years.

(For more, see: here )

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Comments (1)
BowMtnSpirit wrote:
Boy, that sounds like a bunch of mortgage debt. Hmmm… let me guess who the sellers are: Fannie Mae and Freddie Mac, by any chance? Folks, this is complete and utter BS. This looks like a sneaky, under-the-table bail-out of those two bloated, toxic portfolios. So we’re trading good money for bad, again, on the backs of the taxpayers.

I would feel better if someone could show me I’m wrong.

Sep 22, 2011 8:34pm EDT  --  Report as abuse
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