Where to Put $1.8T When You’re Tired of It
In this alert, we assess the impact of the Fed’s new balance-sheet policy not on the
pricing of GSE RMBS – not our bailiwick – but on the safety and soundness of Fannie
and Freddie. We also look at the impact that the very, very gradual sell-off – to what is
likely then still to be a big Fed book – will have on the overall structure of the U.S.
residential-mortgage market. Implications for Congressional action are also assessed.

GSE-061917a.pdf