The Federal Housing Finance Agency (FHFA) is determined to continue its mission of shrinking the balance sheets of Fannie Mae and Freddie Mac and plans only to add product when the two need to buy delinquent mortgages out of delinquent MBS pools.

According to a new update to Congress on FHFA's 'Strategic Plan' for GSE conservatorships, the agency predicts that private sector investors will buy newly issued GSE MBS when the Federal Reserve “gradually withdraws its purchase activity.”

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