Treasury to sell its mortgage-backed securities

By Stacey Vanek-Smith

The U.S. Treasury is to sell $142 billion of mortgage-backed securities it bought during the financial crisis. Will the sale boost mortgage rates? Kai Ryssdal: Mortgage-backed securities are back in the news. Toxic assets might be a more familiar phrase. The Treasury Department bought up almost $150 billion worth of them three years ago when the fate of the global economy seemed to be hanging in the balance. This week Treasury announced it’s going to start selling them off. Karen Petrou with Federal Financial Analytics says to keep financial markets from imploding, the Treasury started buying mortgage bonds. And it’s been holding them, until now. Petrou: You have to do something with them or the government will own the mortgage market and I don’t think anybody wants that.

To listen to the show click here: http://marketplace.publicradio.org/display/web/2011/03/22/pm-treasury-to-sell-its-mortgagebacked-securities/

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