Why the Fed Is Selling Mortgage-Backed Securities—and What It Means for the Economy

Lately, the U.S. economy has seen significant shifts in monetary policy, particularly in how the Federal Reserve manages the flow of money. A key development is the Fed selling mortgage-backed securities (MBS) — bundles of home loans sold to investors. This move reduces liquidity in the U.S. financial system and is a central element of Fed quantitative tightening, a reversal of the expansive measures taken during earlier financial crises.