Credit Suisse predicts there will be strong private investor demand for agency mortgage-backed securities after the Federal Reserve’s program to purchase the securities expires at the end of the month. Credit Suisse researchers back up their forecast by pointing to the large volume of agency MBS currently held by foreign investors and that the 50 largest banks in the country have increased their agency MBS holdings by 17% last year. The researchers said they expect such holdings to increase at a similar rate this year.
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