Fed is cautious on mortgage securities
THE Federal Reserve was yesterday playing down expectations that it would prop up the market for mortgage-backed securities.
The preisdent of the New York Fed said it was still assessing whether or not to include residential mortgage-backed securities in its ambitious consumer lending programme.
“No decisions have been made yet,” William Dudley said in response to a question from the audience at a financial industry conference in New York after giving a speech on the Term Asset-Backed Securities Loan Facility (Talf). “We are still assessing if legacy Residential Mortgage-Backed Security (RMBS) in Talf is feasible.”
Dudley said the lending program could be opened to legacy RMBS later in the summer. So far, the Talf has been used to purchase securities backed by consumer loans.