The average daily trading volume in agency MBS spiked northward in January, increasing 18.3% on a sequential basis, according to figures compiled by the Securities Industry and Financial Markets Association.

In his semi-annual testimony before the Senate Committee on Banking, Housing, and Urban Affairs this week, Federal Reserve Chairman Jerome Powell finally put a number to his talk of “normalizing” the central bank’s balance sheet. He described a balance of $1 trillion as “a reasonable starting point, an estimate of where we might end up.”

The Federal Housing Finance Agency late this week issued a final rule aimed at improving liquidity of the to-be-announced MBS as well as the new uniform MBS, which makes its debut in early June.

Ginnie Mae is in the early stages of developing stress tests for its MBS issuers to ensure they have enough liquidity to withstand adverse economic conditions.

The Securities Industry and Financial Markets Association and the Investment Company Institute, in a joint letter, urged the Internal Revenue Service and the Treasury Department to clarify certain diversification requirements under the single security initiative.

Commercial banks and thrifts reversed a year-long trend during the fourth quarter of 2018 and increased their holdings of single-family MBS, a new Inside MBS & ABS analysis reveals. [Includes two data charts.]

The overall mortgage securitization rate fell slightly in 2018, with 70.0% of home loans originated in the primary market ending up in MBS pools, according to an Inside MBS & ABS analysis. [Includes one data chart.]

Approval of new MBS issuers by Ginnie Mae fell drastically in 2018. Data provided by the agency showed that only eight out of 28 applications received last year were approved. In the year before, Ginnie approved 22 out of 31 applications.

In a bid to expand its access to rental housing credit, Redwood Trust last week announced plans to partner on a deal to acquire up to $1 billion in whole loans from Freddie Mac.

New production of single-family MBS started the new year on a downbeat, with combined issuance by Fannie Mae, Freddie Mac and Ginnie Mae slipping to $80.72 billion in January, ac-cording to a new Inside MBS & ABS ranking and analysis. [Includes two data charts.]