Fed in the market buying agencies

[frostydc4]

Quote from scriabinop23:

Only $3B to move interest rates down 50bp...!!! Imagine what 200B could do. I think we could see fannie mae long rates at 3.0% within a month or two if they keep buying the long duration stuff.

Great post. I had my finger on that pulse ... nice eh?

Interesting how that purchase of longer dated stuff goes to operation 3, which was 12/12. My post was 12/11... Ideas?

Hehehehehehe!

I also thought it was odd that it only took 3B to move rates down 50BP.

Did you also notice the dive in the DX prior to this? When I saw the 50BP drop I knew a Fed POMO was around the corner. I think the big players actually purchased the agencies knowing damn well that the Fed was going to be purchasing them very soon (most likely with some insider info), sold them to the Fed and pocketed the capital gains.

Bernacke did say that he wants to target mortgage rates and he did threaten to issue a coupon pass on the TNX to do so.

 

[drsteph]

Quote from frostydc4:

Hehehehehehe!

I also thought it was odd that it only took 3B to move rates down 50BP.

Did you also notice the dive in the DX prior to this? When I saw the 50BP drop I knew a Fed POMO was around the corner. I think the big players actually purchased the agencies knowing damn well that the Fed was going to be purchasing them very soon (most likely with some insider info), sold them to the Fed and pocketed the capital gains.

Bernacke did say that he wants to target mortgage rates and he did threaten to issue a coupon pass on the TNX to do so.

So... which CMO's/CDO's and ABS's are we gonna buy in preparation?

Full disclosure: Long RMA & RSF (CMO CEF's)