General World News

Investors from 3 Asian nations have heartiest appetite for U.S. MBS

The Federal Reserve’s (Fed) efforts to beat back inflation with its monetary tools have already shifted the winds in the secondary market for mortgage-backed securities (MBS).

The Fed’s continuing effort to wind down its $2.7 trillion MBS portfolio helps fuel widening interest-rate spreads in the MBS market by creating additional MBS supply to be absorbed by investors.

That increased supply, in turn, puts downward pressure on bond prices while expanding yields for investors, who will seek higher coupons on new issuance. Left unchecked, those dynamics can make it much harder for issuers to execute MBS securitization deals at details ⇒

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