The Fed is not considering cutting its purchases of mortgage-backed securities before its overall tightening process begins, Chair Jerome Powell said Wednesday.
Some analysts and economists have questioned why the Fed is buying billions of the mortgage-linked assets each month at a time when home prices have surged. Powell said that he didn’t think the purchases of those assets had a significant impact on the housing market outside of the broader accommodative approach from the central bank.
“There is little support for idea of tapering [mortgage-backed securities] earlier than Treasurys,” Powell said.
Powell did say that there was some support for tapering the mortgage-backed securities at a faster rate than Treasurys, once the process begins.
