When Will The Fed Sell Off Mortgage-Backed Securities?

To prop up the housing market, the Federal Reserve has bought $1.25 trillion worth of mortgage-backed securities over the past year.

The housing market has stabilized. Now there's a call for the Fed to start selling off these securities and get back to more normal sized holdings.

Will the housing market be able to stand on its own two feet without government intervention?

Reuters says: The Federal Reserve could begin to sell off assets later this year and should try to get its balance sheet down to a normal size before the next recession strikes, a senior Federal Reserve official said on Monday.

"Maybe you get in the second half of 2010 or something like that, if things are going pretty well, maybe then you'd sell a little bit at that point and you'd try to see how the market reacts," St. Louis Federal Reserve Bank President James Bullard told Reuters in an interview.