FNMA 5s over 5.5s; Dwarf 4.5s over FNMA 5.5s; Dwarf 4.5s over Dwarf 5s; FNMA 6s over Dwarf 5.5s; FNMA 6.5 over 6s; Dwarf 4.5s and 6s over Dwarf 5s and 5.5s.
Trade Matrix: JP Morgan — MBS
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Yields are soaring into the double digits on bonds and loans funding the AI infrastructure buildout. Bankers are finding it more difficult to offload risk to insurers and other investors.
A split Congress has often been a bullish recipe for Treasuries. Benchmark 10-year yields have been lower on average one and 12 months after midterms that produced such a result.
Smaller and largely unrated non-investment grade entities compose the assets, but the historical managed portfolio and securitized delinquencies and losses remain low, even during recessions.
Among the products disappearing from menus in September included those for cash-out refis and investor home purchases, the Mortgage Bankers Association said.
Agency activity dropped off by 4% in September while non-qualified mortgage issuance was down 18% in the third quarter versus the prior period, BTIG said.