People Get Ready! Agency MBS Prices Drop Like A Rock As Mortgage Rates AND Duration Risk Soar (Energy Prices Drop Over 5% On Covid Shutdown In China)

Sharing is Caring!

by confoundedinterest17

People Get Ready! For The Federal Reserve to actually withdraw its massive stimulus.

I generally discuss that negative impact of rising mortgage rates on the housing market, but today I am focusing on the decline in agency mortgage-backed security prices due to rising mortgage rates.

Here is the uniform MBS price for a 3.5% coupon security. It is falling like a rock with anticipated Fed monetary tightening.

And duration risk is going to the moon! (That is, accelerating rapidly).

FNCL 3.5 coupon MBS has a WAC of 4.206 and a WAM (or WARM) of 359. Not to mention a factor 0.997.

See also  Slowing? US Closed House Sales Down -9.50% YoY As Mortgage Rates Rise On Fed Tightening (New Listings Down -5.7% YoY)

At least energy prices are cooling thanks to China grinding to a halt with the latest Covid epidemic.

I wish The Fed would back off its allegedly ambitious tightening and soothe me.

But hold on, Powell and The Fed are coming with their sword of destruction.

 

Help Support Independent Media, Please Donate or Subscribe:
Trending:
See also  YOU WILL SUFFER WORSE THAN YOU THOUGHT PREPARE NOW FOR CRASH LANDING - GET READY TO LOSE YOUR JOB

Views: 19

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.