Briefing

The First Time the Fed Bought GSE Debt

Abstract: In 1966, Congress gave the Federal Reserve authority to purchase the debt of agencies guaranteed or owned by the federal government. This same authority has enabled the Fed's purchases of mortgage-backed securities (MBS) and debt of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac since 2008 in support of the housing market. In a little-known episode, the Fed shied away from exercising this authority in the 1960s but eventually conceded under political pressure and perceived threats to its independence.

Keywords: Housing; Monetary History;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2014

Issue: Apr