A $200 billion mortgage-backed securities purchase plan is shaping up to be problematic for the broader US economy:

1. The $200b expenditure adds directly to deficit spending, accelerating the trajectory toward $40 trillion in total US debt by year-end. Each round of stimulus without corresponding revenue becomes harder to justify.

2. Flooding the MBS market with capital typically pushes mortgage rates higher—counterintuitive but real. When government demand for bonds increases, yields rise to attract private buyers, making borrowing more expensive for consumers.

The compounding effect: larger deficits, rising debt service costs, potential inflation pressure, and tighter credit conditions. Markets and asset prices move on these dynamics. Worth monitoring how this plays out in rates and equities.