The Treasury Borrowing Advisory Committee of SIFMA told officials that the Federal Reserve's unwinding of its program to buy mortgage-backed securities could increase the government's borrowing costs. The program has pushed down interest rates on many securities, particularly mortgage-backed securities. "Federal Reserve purchases have taken an enormous amount of supply out of the market this past year across fixed-income markets, but next year, financial markets should expect even greater issuance with no support. Such an outcome could pressure rates," the bond dealers said.
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