Annaly Capital Management remained the top REIT in MBS holdings, though several other shops expanded their portfolios at higher rates during the third quarter. The REIT industry added roughly $40 billion to its combined portfolio over the past year. (Includes two data tables.)

The growing securities holdings in Fannie’s retained mortgage portfolio include a large share of non-Fannie agency MBS.

Treasury researchers develop new measures to predict interest rates on mortgages using shifts in MBS prices.

Federal banking regulators issued a final rule to adjust the enhanced supplementary leverage ratio that applies to large banks. The directive aims to increase bank investments in low-risk assets, including Ginnie Mae MBS.

The Fed established the Bank Term Funding Program to help alleviate pressure faced by depository institutions holding MBS and other assets with large unrealized losses. Tracking usage of the BTFP in real-time was limited.

Banks increased their holdings of agency MBS during the third quarter, although investment in Ginnie Mae pass-throughs fell. The industry also pulled back a bit from non-agency MBS. (Includes two data tables.)

Securities industry stakeholders say preservation of the secondary mortgage market, especially MBS futures trading on the TBA market, is essential to keeping mortgage rates low.

The Fed’s shift to rate cuts is helping to increase demand for agency MBS. And other activity at the federal level has prompted a reduction in volatility, providing stability for investors.

While the Fed is moving away from purchases of agency MBS, portfolio managers at PIMCO believe additional purchases are warranted. In the meantime, the GSEs are increasing their investments.

Beginning in December, the Federal Reserve will adjust its balance sheet strategy and no longer reinvest proceeds from payoffs of agency MBS into more MBS.