Fed buys $17.3 billion of mortgage bonds, sells $2.2 billion

NEW YORK Thu May 16, 2013 2:55pm EDT

A view shows the Federal Reserve building on the day it is scheduled to release minutes of the Federal Open Market Committee from August 1, 2012, in Washington August 22, 2012. REUTERS/Larry Downing

A view shows the Federal Reserve building on the day it is scheduled to release minutes of the Federal Open Market Committee from August 1, 2012, in Washington August 22, 2012.

Credit: Reuters/Larry Downing

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NEW YORK (Reuters) - The Federal Reserve bought $17.3 billion of agency mortgage-backed securities from May 9 through May 15, a tad less than the $17.8 billion it purchased last week, the New York Federal Reserve Bank said on Thursday.

In a move to help the housing market, since October 2011 the U.S. central bank has been using funds from principal payments on the agency debt and agency mortgage-backed securities, or MBS, it holds to reinvest in agency MBS.

The New York Fed said on its website the Fed sold $2.2 billion in mortgage securities guaranteed by Fannie Mae (FNMA.OB), Freddie Mac (FMCC.OB) or the Government National Mortgage Association, or Ginnie Mae, in the latest week. It sold $2.7 billion the previous week.

Last September 14, the Fed increased its purchases of MBS to $40 billion a month in its third round of large-scale bond buying in an attempt to support the housing recovery and boost economic growth.

(Reporting by Richard Leong; Editing by James Dalgleish)

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