Ginnie & Fannie Mae conservatorship in Sept 2008 made agency MBS default risk free essentially, the US Treasury covers all losses from GNMA and FNMA up to $200 billion each from the total $400B budget ≈$170B are still available once exhausted it will surely be increased

Illya Gerasymchuk 2025-08-02 16:28

to lower the mortgage rates the Fed can purchase agency MBS - likely they did in QE 1 2008 buying mortgage backed securities raises their price and provides liquidity for dealers. this directly pushes down the yields expect some MBS QE to come in the near future