they will buy 40 + they will reinvest all the principal and interest coming off the existing portfolio.
Will probably total 60-80. Thats most of MBS production. It will compress the spread of all agency Mreits.
My source is CNBC so take it for what it's worth but on Friday's Kudlow show he claimed that Fed governor Fisher stated that the 40 billion QE forever would be raised to 80 billion in Jan.