Why the Worst Is Over for Mortgage-Backed Securities, Maybe
MBS, which got flattened in March, are on the mend, but some warning signs linger. Like, what if the recession caves the housing market?
MBS, which got flattened in March, are on the mend, but some warning signs linger. Like, what if the recession caves the housing market?
Commonwealth’s McMillan says 10-year Treasury yield dive is close to those in previous outbreaks.
Despite expected Fed inaction next year, a strong economy will lift interest rates, the firm forecasts.
Then, the 3-month Treasury could dip below the 10-year, and dispel this dreaded recession portent.
The spread between BBB corporates and 10-year Treasuries is shrinking.
As benchmark 10-year Treasury finally rises over 3.2%, equity investors fear growth-choking interest rates are en route.
Goldman strategist notes rise of short-term rates and projects a 3.6% 10-year Treasury.
The firm points to stock rally and lower junk yields as key to New Year market sentiment.