The difference between the weighted average coupon on Fannie Mae and Freddie Mac MBS soared to an average of 10 basis points in January, with Fannie pools showing consistently higher spreads. According to a report by Wells Fargo Securities last month, the wide gap may be because Fannie is offering sweeter guarantee-fee buy-up/buy-down deals to some issuers.

The average daily trading volume in agency MBS totaled $229.9 billion in February, an 8.5% sequential decline from the previous month, according to figures compiled by the Securities Industry and Financial Markets Association.

Real estate investment trusts increased their holdings of agency MBS during the fourth quarter of 2018, capping a solid year of growth, according to an Inside MBS & ABS analysis. [Includes one data chart.]

New production of agency single-family MBS fell for the sixth month in a row in Febru-ary, sinking to the lowest monthly output in nearly five years. [Includes two data charts.]

The average daily trading volume in agency MBS spiked northward in January, increasing 18.3% on a sequential basis, according to figures compiled by the Securities Industry and Financial Markets Association.

In his semi-annual testimony before the Senate Committee on Banking, Housing, and Urban Affairs this week, Federal Reserve Chairman Jerome Powell finally put a number to his talk of “normalizing” the central bank’s balance sheet. He described a balance of $1 trillion as “a reasonable starting point, an estimate of where we might end up.”

The Federal Housing Finance Agency late this week issued a final rule aimed at improving liquidity of the to-be-announced MBS as well as the new uniform MBS, which makes its debut in early June.

Ginnie Mae is in the early stages of developing stress tests for its MBS issuers to ensure they have enough liquidity to withstand adverse economic conditions.

The Securities Industry and Financial Markets Association and the Investment Company Institute, in a joint letter, urged the Internal Revenue Service and the Treasury Department to clarify certain diversification requirements under the single security initiative.

Commercial banks and thrifts reversed a year-long trend during the fourth quarter of 2018 and increased their holdings of single-family MBS, a new Inside MBS & ABS analysis reveals. [Includes two data charts.]