The Federal Reserve Bank of New York started buying mortgage-backed securities Monday and said it would begin making weekly disclosures of the amounts purchased on Thursday.
The securities it is buying have fixed rates and are guaranteed by Fannie Mae, Freddie Mac, and the Government National Mortgage Association. The New York Fed chose BlackRock Inc., Goldman Sachs Asset Management, Pacific Investment Management Co., and Wellington Management Co. to manage the $500 billion purchase of mortgage-backed securities it plans to complete by June.
The difference between yields on Fannie's current-coupon 30-year fixed-rate mortgage bonds and 10-year Treasuries fell 15 basis points, to 163 basis points, as of 11:30 a.m. in New York.
The spread averaged 175 basis points, or 1.75 percentage points, last month and 179 basis points last year.
The New York Fed had previously said the purchases would include securities with maturities of 30, 20, and 15 years, and will exclude riskier securities such as interest-only bonds.