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?

Trading desks had a busy month in February as rising rates caused participants to act. Where do we go from here? Good question.

The enterprise said 544 loans from uniform MBS pools and 677 loans from mega/super pools were erroneously liquidated due to a servicer’s error. Investors in the securities have the option to pursue claims.

While Fannie began accepting single-family SOFR-indexed ARMs in Au-gust, it stopped taking LIBOR-indexed mortgages at the end of September. By the end of the year, the enterprise will no longer issue LIBOR-linked MBS.

MBS trading slowed in September but market volatility returned this week, portending dicey conditions in the weeks ahead.

Recent uncertainty surrounding equities drove investors into bonds, especially agency MBS. One result: The average daily trading volume in agency product climbed to a multi-month high in August.

As investors sift through the tea leaves of the bond market, the average daily trading volume in agency MBS increased 11% in July from the month prior. But where we go from here is anyone’s guess.

In his semiannual report to Congress on Tuesday, Fed Chair Jerome Powell described the MBS market as "vital to the flow of credit in the economy."

Instead of larger, multi-issuer uniform MBS pools, FHFA wants seller/servicers to closely monitor the prepayment speeds of their broker/correspondent channels to ensure closer alignment of Fannie/Freddie pools.

To ensure the uniform MBS is a “continued success,” the FHFA has asked Fannie and Freddie to be watchful of “key patterns and measures.”