OK, today FHFA boosted Fannie’s and Freddie’s guarantee fees. The idea is to wean homebuyers off cheap (in effect) government mortgages so that it makes sense for private mortgage banks to emerge from under the bed. The trick is to do this slowly enough so that when we leave historic low mortgage rates house prices don’t fall over again. Should be interesting.
Anyway, the Fed’s own MBS experienced an abrupt shrinkage of $15.988 billion while the treasuries number paused and agencies experienced a modest rise that brought that number back further into June values.
This week’s Reuters report1 is, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.2 Here is Doom’s updated CSV version3 of the agencies and treasuries foreign central bank holdings data set.
The treasuries were down by a mere $0.699 billion.
Agencies advanced $2.592 billion, about half of last week’s gains.
*Agen-FM: The dotted line is the foreign central banks’ Agency Debt holdings reduced by the level of the Fed’s own MBS holdings. Since the FRBNY itself is a lightly audited peculiar amalgam of foreign & domestic, central and private bank I think it might be useful to consider the hypothesis that for a while starting in January 2009 the Fed’s MBS holdings were being quietly deemed to be “foreign.” That is, for the first half of ’09 the dotted line seems more sensible than the red one.
The net of US obligations growth was a fairly feeble $1.894 billion.
Twist’s ratio graphs continued modest gains.
Graph “Ratio GSE to Treasury” (from 2000) goes here
The Setser numbers converged a bit.
Notes and References
: “Foreign central banks’ US debt holdings rise – Fed”, by Daniel Bases, Reuters, August 30, 2012.