The minutes of the Federal Reserve's Aug. 11 to 12 policy meeting showed that members believe that gradually removing the central bank's purchases of MBS will make the transition easier for financial markets.

Several participants also noted the need to continue refining the committee’s strategy for an eventual withdrawal of policy accommodation.

The minutes released today provided an update on the continuing development of several tools that could help support a smooth withdrawal of policy accommodation at the appropriate time.

These measures include executing reverse repurchase agreements on a large scale, potentially with counterparties other than the primary dealers.                                               

At the meeting, Fed officials agreed to extend the final date for making new Term ABS Loan Facility loans into 2010, but remained skeptical about extending the range of eligible assets.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.