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Fed's Brainard says central bank's mortgage purchases part of broader effort to lower rates

·1 min read

June 1 (Reuters) - The Federal Reserve's purchases of mortgage-backed securities are having the "same" effect on longer-term rates as its purchases of Treasury securities and are part of a broader effort to support the economy, Fed Governor Lael Brainard said on Tuesday.

"From a monetary accommodation perspective, the effect of purchases of Treasuries and agency MBS is generally the same," Brainard said during a virtual conversation organized by the Economic Club of New York.

The Fed views the current monthly pace of purchasing $80 billion of Treasury securities and $40 billion of mortgage-backed security as an "effective" way to hold down rates and provide certainty to markets, Brainard said in response to a question about whether the central bank should be purchasing mortgage bonds at a time when the housing market is performing strongly.

"It’s effective in the current composition and that is the lens through which we are continuing," Brainard said. (Reporting by Jonnelle Marte in New York; Editing by Andrea Ricci)