A flattening yield curve and potential imbalance between the supply and demand make for a “distinctly less positive outlook” for fixed-rate agency MBS in the second half of this year, according to a new analysis from Bear Stearns. Several key MBS investor groups – commercial banks and the government-sponsored enterprises themselves – are unlikely to show any increased appetite for fixed-rate MBS in the months ahead, says the report, authored by V.S. Srinivasan. At the… [Data tables included]