The MBS market, like those for other fixed-income securities, became extremely volatile, and with the unemployment rate spiking, market participants worried that borrowers would be unable to make their mortgage payments.
-7The Federal Reserve’s response to the crisis, which was prompt and forceful, included moving the policy interest rate to the effective lower bound, conducting largescale purchases of Treasury securities and agency MBS, and implementing a number of emergency lending facilities to support the continued flow of credit to families, businesses, nonprofits, and state and local governments.