| Chinas U.S. Mortgage-Bond Buying May Be Bet on a Coming QE3, Nomura Says and Some at Fed saw more bond buying before long |
| News - Financial News |
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Chinese investors added U.S. government-backed mortgage securities and so-called agency debentures in December, signaling the country may be anticipating further purchases of housing debt by the Federal Reserve, according to Nomura Securities International analysts. The $9.5 billion rise reported today in China(TM)s holdings in the debt came as the nation dumped $33 billion of long-term Treasuries, according to New York-based analysts at the Japanese bank. The category includes home-loan bonds guaranteed by Ginnie Mae and the Federal Home Loan Bank system(TM)s unsecured notes. Fed officials including Chairman Ben S. Bernanke have been saying the central bank may undertake additional bond buying, focusing on mortgage debt, to stimulate the economy in a process known as quantitative easing, or QE. [Read the full article] WASHINGTON, Feb 15 (Reuters) - A few Federal Reserve officials in January believed another round of bond buying by the central bank would be needed before long to support the U.S. economy while others withheld judgment to await more data. The few officials who believed more asset purchases could be warranted soon pointed to the prospect for continued high unemployment and a lack of inflation pressure, minutes of the Fed's Jan. 24-25 policy meeting released on Wednesday showed. Others thought more bond buying would be necessary only if the recovery lost momentum or if inflation dipped, the minutes said. "The decision to provide additional accommodation to the economic recovery remains a distinct possibility," said Millan Mulraine of TD Securities. The minutes underscored that the Fed's threshold for taking further action remains relatively low, he added. [Read the full article] 0900/1400: Arlington, Va. - Federal Reserve Chairman Ben Bernanke speaks on "Community Banking" before a conference hosted by the Federal Deposit Insurance Corp. 1000/1500: U.S. Treasury Secretary Timothy Geithner testifies before the Senate Budget Committee on President Barack Obama's budget proposal. 1000/1500: Treasury Undersecretary for International Affairs Lael Brainard, State Dept. Undersecretary for Economic, Energy and Agricultural Affairs Robert Hormats, and Federal Reserve Division of International Finance Director Steve Kamin testify before the Senate Banking Committee on the European debt crisis. 1100/1600: The Treasury Dept. makes weekly announcement of 3- and 6-month bill sale offerings; announces size of 2-year, 5-year and 7-year notes. [Read the full article] 
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