6.28.21
The Wall Street Journal reports that Federal Reserve officials are debating reducing purchases of mortgage-backed securities. The Fed has bought $982 billion of mortgage bonds since March 2020, and currently plans to keep buying at least $40 billion each month. These purchases aim to stimulate the economy as it recovers from the pandemic with many pointing out that the combined purchases of mortgage and Treasury securities lower long-term interest rates overall. However, other Fed officials argue these actions are contributing to skyrocketing home prices and even potentially stimulating housing bubble.