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The First Time the Fed Bought GSE Debt

Author

Listed:
  • Renee Courtois Haltom
  • Robert Sharp

Abstract

In 1966, Congress gave the Federal Reserve authority to purchase the debt of agencies guaranteed or owned by the federal government. This same authority has enabled the Fed's purchases of mortgage-backed securities (MBS) and debt of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac since 2008 in support of the housing market. In a little-known episode, the Fed shied away from exercising this authority in the 1960s but eventually conceded under political pressure and perceived threats to its independence.

Suggested Citation

  • Renee Courtois Haltom & Robert Sharp, 2014. "The First Time the Fed Bought GSE Debt," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue Apr.
    • Handle: RePEc:fip:fedreb:00011
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    Keywords

    Housing; Monetary History;

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