More investors are optimistic about Fed's plan to end MBS purchases

01/28/2010 | Wall Street Journal, The

The Federal Reserve reiterated its plan to end its $1.25 trillion program of buying mortgage-backed securities, and conventional wisdom holds that the move will be a disaster for housing. However, investors are increasingly betting that the move will not cause mortgage rates to soar and that the overall fear is overstated. The argument is that investors in search of higher-yielding securities will flock to government-supported mortgage-backed securities, according to The Wall Street Journal.

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Wall Street Journal, The

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