The Federal Reserve may begin selling agency mortgage-backed securities next year at the earliest, say analysts. While selling the securities could be βa useful tool,β according to Christopher Sebal, cio of Advantus Capital Management, βIt would also be outright reckless.β Such a sale could put considerable pressure on the sector and devalue the rest of its MBS holdings. Brian Sack, executive v.p. and head of the markets group at the Federal Reserve Bank of New York said the sales should be done slowly to make it easier for the market to digest.
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