Fed reduces redemption cap for Treasury securities, allows agency MBS runoff to proceed; Annaly to issue securitization with HELOCs; non-agency MBS term financing transaction from PIMCO.

Three former CEOs of the GSEs this week debated the impact of federal conservatorship, what steps must be taken to safely end the oversight and what the GSEs should look like afterwards.

Bank holding companies sharply reduced their trading-account holdings of MBS and ABS in the fourth quarter. JPMorgan Chase and Citi recorded significant declines. (Includes two data tables.)

FICC proposes volatility event charge; securitization-as-a-service offering from Financely; Morningstar acquires DealX.

If the GSEs are released from conservatorship, some participants in the agency MBS market insist the to-be-announced market, uniform MBS and Fannie/Freddie CRT activity should remain untouched.

Fourth-quarter declines in agency MBS portfolios at Annaly and AGNC were key to an overall downward drift in REIT MBS holdings. (Includes two data tables.)

Demand for MBS/ABS remains high, helped by interest rate trends. But President Trump is a wildcard, prompting some caution among investors.

While the fair value of bank MBS declined in the fourth quarter, the industry reported a slight gain on an amortized-cost basis. Bank of America led the ranking of bank MBS investors, though its portfolio fell $27 billion. (Includes two data tables.)

The leaders of the big REITs that invest in agency MBS want a federal backstop for GSE MBS to continue.

Actions by the Federal Reserve are helping to reduce volatility in the agency MBS market. Investors are comfortable with current conditions, with supply and demand seen as being in balance.