Banks increased their holdings of Fannie/Freddie pass-throughs by $176 billion in the first quarter, while shrinking their Ginnie MBS holdings. Bank of America boosted its Fannie/Freddie portfolio by $85 billion. (Includes two data charts.)
MBS trading is drifting lower in a rising rate environment, but the outlook remains cloudy as mortgage bankers wonder how many more months they have left before refis drain for good. Or will they?
With both Fannie and Freddie now issuing green single-family and multifamily MBS, the enterprises have become a favorite for investors seeking environmentally or socially responsible assets.
Mortgage trading narrowed this spring at a time when rates were rising. Lo-and-behold, rates are headed south once again. But inflation fears are accelerating. What’s an MBS owner to do?