24. Federal Reserve · Notable
Bar future Fed purchases of mortgage-backed securities and sell off holdings
Printed page 735 24. Federal Reserve
“The Federal Reserve should be precluded from any future purchases of MBSs and should wind down its holdings either by selling off the assets or by allowing them to mature without replacement.”
What has happened
- Partially done
The second half of this ask is being delivered and the first is not. From December 1, 2025 the Federal Open Market Committee directs the Desk to "reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills" — mortgage-backed securities now mature without replacement, which is one of the two methods the Quote names, and the proceeds leave the mortgage market entirely. The H.4.1 release of August 27, 2026 shows agency mortgage-backed securities of $1,923,242 million, down $187,558 million over the year. Nothing precludes future purchases: the Committee retains the authority and could resume buying agency mortgage-backed securities at any meeting.
Research log
What was searched, and what didn’t count as evidence
Research notes
Two-object ask, one object delivered, so partial under playbook §3b: the wind-down is happening by maturity without replacement; the preclusion of future purchases would need a statute or at least a standing Committee commitment, and there is neither.
Note the direction of travel relative to #2010: the aggregate balance sheet stopped shrinking on 2025-12-01, but the mortgage-backed portfolio keeps shrinking because its run-off is now recycled into Treasury bills rather than reinvested in agency securities. The two items are leveled differently for that reason.
- Action
- restrict
- Object
- Federal Reserve purchases and holdings of mortgage-backed securities
- ID
- 2014