Replies to post #429480 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

yes
mortgage rates will rise

the FED can not become a net seller of paper and not influence upwards the rates that "sellers/issuers of bonds/paper" need to offer to attract enough buyers

when FED is buying then there is demand from FED for paper

when FED is selling then there is no demand from FED and its adding to the supply of paper "issued for sale" --- and thus interest rates rise to attract enough buyers

it is no statement on quality of MBS or demand for housing or .... it is supply and demand private market forces

[bcde]

"A more interesting fact - their plan will reduce the US money supply by $2.1 trillion over the next 4 years. This would be a PERFECT opportunity for Trump to do what he said during the campaign and PRINT MONEY to reduce the deficit. "

contrarian bull,
US Gov creates (or prints) money through Feds (US Gov agency FRS along with private FRBs). Tsy and FRS work together on these monetary policies.
So it does not work the way you are suggesting.

[Sogo]

If they printed $2T, Fed's balance sheet grows. They're trying to shrink their balance sheet bc it's at unbelievably extreme levels.

Perspective: the Fed's (and any central bank's) long game is to throw a lot of dollars out into the system for a while (years), and then pull them back out of the system for a while (years). Every dollar is actually a debt. They're issuing lots of debt over years and then calling it in over a period of years also. They are playing the amount of money in circulation like an accordion. Push it out, then suck it back in, and make money doing it. If they have decided to start sucking dollars back in, why would they also want to print $2T of new dollars? It wouldn't fit what they're trying to do now as they move into the next part of the cycle.