NY Fed to pump in another $10 billion today

This time to buy mortgage bonds

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The New York Federal Reserve continues to point a firehose of liquidity at clogged-up financial markets.

The NY Fed just announcedit will purchase another $10 billion of mortgage-backed securities (MBS) on Thursday via two separate operations.

The cash injections, according to the NY Fed, are aimed at tackling “highly unusual disruptions” in the mortgage bond market linked to the coronavirus outbreak.

The $10 billion is part of the $200 billion in mortgage bonds the Fed promised on Sunday to buy as it relaunched quantitative easing, or QE.

And this is on top of the flurry of overnight repo operations that are aimed at unclogging short-term funding markets.

And the NY Fed made clear its MBS may only be beginning.

The statement said the NY Fed “stands ready” to buy even more mortgage bonds if it’s needed to keep markets operating smoothly.


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