• Bloomberg

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Hideo Shimomura, an investor who predicted the Federal Reserve would snap up mortgage securities in addition to Treasuries, said the U.S. central bank may increase its bond purchases as soon as its November meeting.

Shimomura said Aug. 30 the Fed would consider buying mortgage-backed securities, which help guide home-loan costs, to help borrowers and spur America’s housing market. Morgan Stanley, one of the 20 primary dealers authorized to trade directly with the Fed, called Wednesday’s decision to target the securities a “surprise move.”

“They may do additional easing at their next meeting,” said Shimomura, who helps oversee the equivalent of $78.2 billion as chief fund investor at Mitsubishi UFJ Asset Management Co. “It will be a mixture of Treasuries and agencies. There’s no limit on easing.”

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