Here Comes Another $100+ Billion From Federal Home Loan Banks

The Federal Home Loan Bank System just approved the purchased of another $100 billion in Fannie Mae and Freddie Mac backed mortgages.  If the Federal Home Loan Banks take off the books another $100 billion from Fannie and Freddie, that of course frees up Fannie and Freddie to purchase another $100 billion in mortgage backed securities.  This is on top of the $200 billion OFHEO authorized late last week…see this earlier post.
Liquidity is coming back to the market…only time will tell if it’s too little too late.