At the end of this month, the US Federal Reserve is due to freeze its programme to purchase Fannie and Freddie agency MBS that it implemented in the wake of the financial crisis. Logic might suggest that could potentially deliver a jolt to the market.

he degree of assistance that the Fed has provided has been eye-poppingly large: right now it is holding some $1,200bn of MBS

in the past couple of years, the Fed (and others) have poured so much money into the system, that this has made it painfully hard for mainstream fixed income investors to get returns, without taking very wild risks.

During the past two years, the full impact of the collapse of the securitisation market has been largely concealed from most investors – let alone American politicians – because of the sheer scale of government assistance on offer.

investors have been lulled into something of a false sense of security

I fear this may yet be a lull before a bigger storm. Read more at www.ft.com