The Federal Open Market Committee on Wednesday decided to shave $25bn off the planned $200bn purchase of debt issued by state-owned mortgage giants Fannie Mae and Freddie Mac. The decision was justified on technical grounds reflecting “the limited availability of agency debt”. The reduction is a tiny dent in the Fed’s overall $1,750bn asset purchase programme, although it was notable that the committee cut the $25bn rather than using it to buy Fannie and Freddie mortgage-backed securities.
