Despite Prepayment Risk, MBS Markets Look More Attractive as Investors Drive Treasury Yields Lower
August 12, 2011
The rush to Treasuries that resulted from investor fears about the U.S. and European economies has pushed interest rates closer to the level where a major mortgage refinance wave could start to take shape, but analysts say its a good time to load up on agency MBS. The Feds commitment to keep interest rates low until at least mid 2013 strongly improves demand technicals for MBS, in our view, said analysts at Credit Suisse in a report issued after the Federal Open Market Committee vowed to keep rates at historically low levels for at least two more years. This provides ...