Fed report sparks speculation, roiling mortgage-bond market

01/5/2012 | Bloomberg

The Federal Reserve's white paper on the housing market triggered speculation that the government might do more to help the troubled housing market. That speculation helped drive up Fannie Mae and Freddie Mac mortgage bonds as others declined. "The white paper increases the probability of [a third round of quantitative easing] centered on [mortgage-backed securities] as the paper emphasizes that housing is still a key problem with no easy solution," according to Morgan Stanley analysts.

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