Central Banks Favor U.S. Agency Debt Over Treasuries

by Michael McDonald.

"Fannie Mae was created in 1938 during the Great Depression by President Franklin D. Roosevelt as part of an effort to bolster the economy by injecting money into the housing market. Congress set up Freddie Mac in 1970. The companies buy mortgages from financial institutions, enabling banks to make more loans. Their government charters have helped Fannie Mae and Freddie Mac borrow at lower rates than competitors."