Mortgage borrowers and investors often assume that when the Federal Reserve lowers its target for the federal funds rate, mortgage rates will follow in lockstep. This is generally true when both short and long-term interest rates are falling in tandem.
More recently, as the Wall Street Journal pointed out - mortgage rates have held steady or even risen slightly as the Fed has lowered its short-term rate.
While liquidity has remained abundant in the last several years, recent quarterly trends point downwards as more entities are paying a higher rate in the Secured Overnight Financing (“SOFR”) market. Since September, the 75th percentile of SOFR has been trading more than 5bps over its median, peaking recently over 8 basis points and signaling a logjam in the liquidity superhighway.
Dynex Capital is watching the Federal Reserve’s upcoming rate cut, expected to be between 25 and 50 basis points. This decision could shape future cuts and economic momentum. With Treasury yields down and mortgage rates stable, a smaller cut seems possible. Investors are focused on the Fed’s message, as it will influence borrowing, risk-taking, and market confidence in the months ahead.
In this edition of The Dynex Angle, we bring you highlights from co-CEO Smriti Laxman Popenoe, CFA’s recent interview on the After Earnings (from Morning Brew) show with Katie Perry.
“We don’t predict, we prepare.”
Read some of the key takeaways from this discussion and learn more about how Dynex’s experienced team successfully navigates an ever-evolving macroeconomic environment to deliver steady yields and consistent returns.
In a special edition of the The DynexAngle we look back at key lessons from Nareit REITweek 2024 where Dynex CEO Byron Boston and CFO Rob Colligan recently discussed how the mREIT sector is adapting to economic shifts, particularly in agency mortgage-backed securities.
Get the highlights direct from Dynex leadership.
The Federal Reserve Board has said the 2024 presidential election will not play a role in its economic policy decisions, but how will that stance play out in the market as US debt levels swell and interest costs rise?
In the latest edition of The Dynex Angle, we look at some economic factors that could set the stage for this election season.
by Byron Boston, Chairman and CEO, Dynex Capital, Inc.
As we get older, people tend to work less, save less, and need more income from our financial assets to maintain our well-being. In examining current trends among aging households in the US, many of us are not prepared for a new financial reality beyond the workforce, making assets that produce regular income a critically important topic for Dynex to focus on.
As we know all too well from thepandemic , contentious U.S. election cycles , and other geopolitical challenges abroad , volatile economies result in greater policy uncertainty and higher financing costs.
But to what degree?