The move is part of the US federal Government’s $500bn bailout programme, and could be mirrored by the UK Treasury in the coming months if Sir James Crosby’s plans are enacted.
The New York Fed is using selected private investment managers as agents in these purchases. It is also buying assets from Ginnie Mae, a Government Sponsored Enterprise within the Department of Housing.
Summary data detailing these operations will be available on the New York Fed’s website beginning Thursday, January 8, 2009, and will be updated on a weekly basis each Thursday.
The Fed says this move is intended: “to support the mortgage and housing markets and foster improved conditions in financial markets more generally”.