الخميس, 20 حزيران/يونيو 2019 10:15

Another Mortgage Meltdown is Coming

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(New York)

We know, we know, a mortgage meltdown sounds like a claim coming out of left field. However, it comes from a potentially big issue that no one is paying attention to—the fact that the Fed is winding down its massive $1.6tn+ mortgage bond portfolio. As the Fed has begun to unwind its MBS portfolio, there are growing worries over the economy and real estate market. This could lead to a mortgage shock. Spreads between MBS and Treasuries have already risen as investors have grown nervous about oversupply.


FINSUM: So this is more of a technical issue than a fundamental one, but given the confluence of negative sentiment and oversupply, there is certainly some significant risk on the horizon for MBS.

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