According to data released a short time ago, the Federal Reserve took down another big slug of mortgage backed securities over the last week – some $53 billion as indicated below – in what is supposed to be their second-to-last mid-month buying spree that has produced the regular stair-step pattern in the chart.
When you look at the simplified version of the asset side of the Fed’s balance sheet over the last 18 months, it becomes abundantly clear how the source of all that late-2008 credit market mess – souring mortgage debt – has now become the property of the central bank.
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