Friday, November 13, 2009

Fears of end of Fed easing

As the Federal Reserve’s programme of buying mortgage debt edges towards $1,000bn this week, investors are starting to worry about what happens once the central bank starts to slow down and exit from this key plank of its monetary easing policy.

mbs-thumb.jpg“Many investors treat the three asset classes that the Fed has been buying – Treasuries, agency debt and agency mortgage-backed securities – as very similar,” says Ajay Rajadhyaksha, head of US fixed income strategy at Barclays Capital.

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