Purchase of Fannie/Freddie Debt
Date:
November 25, 2008
Policy Area:
Sector Policy (Non-Financial)
Economic Target:
Government and GSEs
Action Type:
Equity Purchase
Maximum Amount:
$200.00 billion
Amount Spent:
$75.11 billion The Federal Reserve originally announced that it would purchase up to $100 billion in debt from Fannie Mae, Freddie Mac, and Federal Home Loan Bank, and up to and $500 billion in mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae. On March 18, 2009, the Federal Reserve raised its intended purchases of agency debt (Fannie, Freddie, Federal Home Loan Bank) to $200 billion (a $100 billion increase) and its intended purchases of agency mortgage-backed securities to $1.25 trillion (a $750 billion increase).
In a statement from the FOMC on 9/23/2009, the Fed will "gradually slow the pace" of its purchases of agency debt in order to promote a smooth market transition. In addition, the FOMC stated that such purchases should expire by the end of Q1 2010.
Notes:
Amount spent indicates holdings of agency debt and mortgage backed securities as of 1/16/2013. See http://www.federalreserve.gov/releases/h41/Current/. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.