Cutting the connection

Federal Reserve Chairman Ben S. Bernanke may keep reinvesting maturing debt into Treasuries to maintain record stimulus even after making good on a pledge to complete $600 billion in bond purchases by the end of June. Bloomberg

The Fed holds mortgage backed paper. So it receives prepayment cash, sometimes. So, if they do fair accounting, swap out the residual value for Treasuries. But the Fed is losing customers elsewhere, in the endgame it has only one customer.