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20 01, 2023

DAILY012023

2023-01-20T16:43:26-05:00January 20th, 2023|2- Daily Briefing|

Waller Throws Fuel on IOR-Recapture Fire

The American Banker today reports that FRB Gov. Christopher Waller answered a question by saying that the Fed does not need the $2 trillion or so housed in the ONRRP to conduct monetary policy. Mr. Waller also said the Fed does not need the level it now holds of central-bank deposits from banks, noting that QT should continue with very significant reductions even though the precise amount of reserves needed to ensure market liquidity is unknown.

Daily012023.pdf

11 01, 2023

FedFin on: An Implacable Problem With a Policy Solution

2023-01-11T16:47:56-05:00January 11th, 2023|The Vault|

As the Fed has hiked interest rates, mortgage rates have of course also gone up, sending a sudden chill through the residential market and putting home ownership even more out of reach for all but those for whom the home equity they still have after prices correct suffices for long-term wealth accumulation.  However, mortgage rates have often risen higher than expected from usual yield spreads and thus Fed tightening is even more excruciating not just for the mortgage market, but also for FHFA’s equitable-finance mission and the Fed’s hoped-for soft landing…

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

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11 01, 2023

GSE-011123

2023-01-11T13:13:55-05:00January 11th, 2023|4- GSE Activity Report|

An Implacable Problem with a Policy Solution

As the Fed has hiked interest rates, mortgage rates have of course also gone up, sending a sudden chill through the residential market and putting home ownership even more out of reach for all but those for whom the home equity they still have after prices correct suffices for long-term wealth accumulation.  However, mortgage rates have often risen higher than expected from usual yield spreads and thus Fed tightening is even more excruciating not just for the mortgage market, but also for FHFA’s equitable-finance mission and the Fed’s hoped-for soft landing.  In this analysis, we assess the dynamics of recent mortgage pricing and what might be done about it.

GSE-011123.pdf

7 09, 2022

FedFin: The Big Squeeze

2022-12-20T14:27:31-05:00September 7th, 2022|The Vault|

Reinforcing the sharp turn-around in housing markets evident since the Fed surprised markets with its first 75 bps hike, a new working paper from the San Francisco Fed provides the first hard evidence of how monetary-policy shocks in the U.S. hit listing prices hard and fast….

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

7 09, 2022

GSE-090722

2022-12-20T14:26:18-05:00September 7th, 2022|4- GSE Activity Report|

The Big Squeeze

Reinforcing the sharp turn-around in housing markets evident since the Fed surprised markets with its first 75 bps hike, a new working paper from the San Francisco Fed provides the first hard evidence of how monetary-policy shocks in the U.S. hit listing prices hard and fast.  The study’s approach is data-based, but theoretical; today’s markets suggests it’s also prescient.

GSE-090722.pdf

23 06, 2022

GSE-062322

2023-01-25T15:52:27-05:00June 23rd, 2022|4- GSE Activity Report|

No Oops re UMBS

Following a sharp critique of GSE capital standards earlier today from the Urban Institute, FHFA Director Thompson today acknowledged Fannie and Freddie’s new 50 bps fees when one of the GSEs guarantees the other’s collateral for UMBS purposes.  The Urban Institute paper argued that these fees properly reflect the capital cost of the rules’ weightings related to these cross-guarantees, going on to say that the fees are likely over time to reduce investor appetite for Freddie Mac securities and thus undermine the UMBS construct and its broader benefits.

GSE-062322.pdf

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