As we calculate it, the Fed today committed to purchase around 60% of monthly agency production until the economy perks up.  We hope all this volume doesn’t come from refis without any stimulus effect – the Fed’s huge MBS holdings to date have done little to promote housing-market recovery.  But, for as long as the Fed gobbles GSE paper, Fannie and Freddie are safe from any fundamental restructuring not forced on them by outside market events.

The full report is available to subscription clients.  To find out how you can sign up for the service, click here