PIMCO recommends the Fed pause its MBS reduction to boost the housing market
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最新报道：According to Bijie.com, on September 17 (UTC+8), US bond investment firm Pacific Investment Management Company (PIMCO) stated on Tuesday that the Federal Reserve should consider halting its reduction of its mortgage-backed securities (MBS) holdings to boost the US housing market. Since launching its interest rate hike cycle in 2022, the Fed has gradually reduced its mortgage bond holdings on its balance sheet through quantitative tightening (QT), which allows principal and interest payments on MBS to mature without reinvesting the proceeds. In a Tuesday report, PIMCO noted that the Fed's continued reduction of MBS holdings over the past three years has led to "exceptionally wide" mortgage spreads (the gap between Treasury yields and mortgage rates). As of last Friday, the spread was approximately 230 basis points, near a historical high. This has also pushed up the average interest rate on the most common 30-year fixed-rate mortgage in the US, currently at 6.35%. Mark Seidner, PIMCO's Chief Investment Officer for Alternative Strategies, and others wrote that reinvesting the proceeds from MBS principal and interest payments could be as effective as, or even more effective than, rate cuts in lowering mortgage rates.
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