Agency Mortgage-Backed Securities

The New York Fed is authorized by the Federal Open Market Committee (FOMC) to buy and sell agency mortgage-backed securities (MBS) for the System Open Market Account (SOMA) to the extent necessary to carry out directives adopted by the FOMC. Dollar roll and coupon swap transactions may also be executed as needed to help facilitate the settlement of outstanding MBS purchases.

Since the end of 2008 the FOMC has directed the New York Fed's Open Market Trading Desk (the Desk) to purchase and reinvest agency MBS for the SOMA portfolio on several occasions to implement monetary policy efficiently and effectively. These transactions are executed with primary dealers. In addition to agency MBS, which were first purchased in early 2009, other securities purchases have included Treasury securities, agency debt securities and agency commercial mortgage-backed securities. Additional information on agency MBS operations is available in the FAQs on Agency MBS Operations.

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