What’s Going On Here?

When the Fed structured QE1, it resulted in the acquisition of approximately $1.2 trillion in Mortgage-Backed Securities (MBS) for the Fed’s balance sheet. (see WSHOMCB)

In this graph we see the rollover and decline of the total holdings beginning in 2010 after QE1 ended and as securities matured. However, in early 2011, the decline slowed and ceased at the end of the year. Since then, we have begun to see new purchases of MBSs. We wonder what strategy or policy the Fed is pursing here.

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