Articles

MBS Day Ahead: 2.0 MBS Coupon Staking Its Claim; Fed Day

Posted To: MBS Commentary

This morning, GDP came out at -4.8%, the lowest reading since Q1, 2009. The Fed announcement and press conference will be out this afternoon. But the most interesting development may well be the emergence of the 2.0 30yr fixed UMBS coupon in the secondary mortgage market. What does that actually mean? Simply put, a new "bucket" is opening up that allows for 30yr fixed rates as low as 2.25%. Before you get too excited, that doesn't mean rates of 2.25% are available, and it carries absolutely ZERO implications about their likelihood. What it DOES mean , however, is that the lending/trading community see 30yr fixed rates of 3.125% and under being prevalent enough for long enough that investors are willing to buy exposure to risks specifically associated with those lower rates. What…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


Leave a Reply