Exactly! This information can add greatly to longterm stability/confidence:
Testifying before Congress on Wednesday [Feb. 27, 2013], Federal Reserve Chief Ben Bernanke said that the Fed could decide to sell its mortgage-backed securities (MBS) more slowly than originally anticipated.
This is really important insight because, as he intimated on Capitol Hill, the Fed may even decide not to sell its MBS supply and let them mature.
What seems to have been an original objective of the Fed was to be somewhat of the “bad bank” buying securities (albeit not the deliberately extremely “toxic” ones) while waiting out the recession so the assets of the financial sector could begin increasing in value again rather than forcing all banks to write off all bad debts, as in marking everything to market at the bottom of the downturn, which would have wiped out the entire sector, forcing the government to takeover all banking services to allow the economy to continue functioning. Taking over all large-scale commercial banking entities as a governmental agency is not within the scope of the Fed’s mandate, Ben Bernanke would say.
Well, housing is on the upswing again, but selling the securities might more than prevent overheating. Slowing and then just stopping the buying without selling might adjust rates more than enough, at least for the foreseeable future.
Whatever they do, we hope it isn’t herky-jerky and done without plenty of forward guidance/transparency!