Troubled by the persistently high cost of funding for the GSEs, the Federal Reserve Board said Tuesday it would begin purchasing the debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks next week.

For weeks, the GSEs have been forced to sell their debt at much higher prices than normal because investors — seeking to avoid any risk — have fled to bank debt, which is now guaranteed by the government. The higher debt costs have been passed on to consumers in the form of more expensive mortgage rates — the exact opposite of what the government was hoping to accomplish when it placed Fannie and Freddie into conservatorship in September.

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