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MBS RECAP: Major Lousy Day For Bonds (Not Because of Japan)

Posted To: MBS Commentary

In particular circles, considerably was designed of right away news that the Bank of Japan would be getting less bonds. That&#039s about as significantly as most news stories delved into the subject matter, even with it currently being extra complex than bond-getting news in the US. Allow&#039s break it down: In the US, the Fed lays out a guaranteed amount of money of bond getting that will occur every month. The Fed has also set in motion a guaranteed program of balance sheet reduction. Exclusively, they will reinvest bond buying and selling proceeds only up to the extent those people proceeds exceed steadily mounting caps (now mounting at $6bln/month for Treasuries and $4bln/month for MBS). The Bank of Japan (BOJ) lays out a extra specific menu of bond getting alternatives but with extra flexibility on the amount of money. For occasion, it&#039s most modern program ( sense free of charge…(go through extra)

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