Posted To: MBS Commentary

More often than not during the past few months, a quick glance at the MBS Live dashboard reveals that MBS are making better gains than Treasuries. Is this the way it always is? Is something new and different happening? Why hasn't it been as noticeable in the past? First off, this is definitely not the way it always is. Here's a medium term look at the gap between the computed MBS yield (not an objective number, as it relies on an equation that has to guess how rates will move in the future and how borrowers will respond in terms of refi demand) and 10yr Treasury yields. Clearly, the relative performance ebbs and flows, and we're just more able to notice this instance of outperformance for a few reasons. First off, the past month has been some of the strongest outperformance in recent…(read more)

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Source: Mortgage News Daily