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Bond Markets Take a Hit as Fed Continues Cutting Purchase Amounts

Posted To: MBS Commentary

There was a sharp sell-off in the bond market on Friday afternoon–at least relative to the day's relatively calm trading patterns–as the Fed once again announced an updated bond buying schedule for the following week. It was a repeat of a similar performance seen at the end of last week when the Fed cut Treasury purchase limits from $50 bln per day to $30 bln. The Fed's mortgage purchases walked a similar path, falling to $15.5bln / day this week from $25bln / day for most of last week (and $40bln the week before that). Today's cut to Treasury purchases was notable because it was the first time the amount fell by at least 50% . Specifically, the Fed will now cap buying at $15 bln per day in Treasuries versus this week's $30bln daily total. MBS purchase limits were pared to…(read more)

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