Fed Should Taper MBS Purchases Really Fast, Blinder Says

The video discusses the Federal Reserve's approach to tapering, particularly in relation to mortgage-backed securities (MBS). It questions the rationale behind the Fed's current $40 billion monthly MBS purchases given the rising housing market. The speaker presents two contradictory views: one advocating for rapid tapering of MBS purchases and another predicting the Fed's conservative, proportionate tapering approach. The discussion highlights the Fed's cautious nature and reflects on the historical context of quantitative easing (QE) in MBS since 2009, when the mortgage market was struggling.

What is the speaker's main concern regarding the Federal Reserve's purchase of mortgage-backed securities?

• The influence on international trade.

• The effect on the stock market.

• The logic behind the purchase given the current housing market.

• The impact on inflation rates.

According to the speaker, what should the Federal Reserve do when it comes time to taper?

• Focus on buying more Treasurys.

• Maintain the current level of purchases.

• Taper the purchases of mortgage-backed securities quickly.

• Increase the purchase of mortgage-backed securities.

Why does the speaker believe the Federal Reserve is unlikely to taper mortgage-backed securities quickly?

• Because of political pressure.

• Due to a lack of resources.

• Because the Fed is very conservative.

• Due to high inflation rates.

What does the speaker think about the Fed's approach to tapering between Treasurys and MBS?

• It is the best approach.

• It is irrelevant.

• It is a minor mistake.

• It is a colossal mistake.

What historical reason does the speaker give for the Fed's initial purchase of mortgage-backed securities?

• To boost international trade.

• To support a failing mortgage market in 2009.

• To increase employment rates.

• To control inflation.