Fed adds on-the-run securities to housing-related GSE purchase program

By Angela McDaniels

Tacoma, Wash., Sept. 1 - The Federal Reserve Bank of New York said the program under which it purchases direct obligations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks will include on-the-run securities going forward.

The bank purchases fixed-rate, non-callable, senior benchmark securities from the housing-related government-sponsored enterprises under the program and has been focused on off-the-run securities.

The change represents a technical adjustment designed to mitigate market dislocations and to promote overall market functioning, according to the bank's web site.

The bank will purchase up to $200 billion of securities under the program in 2009.

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