Why Today's Environment Favors Mortgage-Backed Securities

AllianceBernstein (AB)4.97K FollowersFollow5ShareSavePlay(6min)SummaryA strong housing market and supportive federal policy could benefit US mortgage-backed securities.In an effort to lower mortgage rates, President Trump in January ordered government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to purchase $200 billion of agency MBS.Monetary policy could also benefit MBS, in our analysis. On the heels of 175 basis points in rate cuts this cycle, cash rates have drifted to just above 3.5%.For the time being, we believe the confluence of public policy and strong housing fundamentals provides a favorable tailwind for MBS investors. stanciuc/iStock via Getty Images By Monika Carlson and Charlie Choi A strong housing market and supportive federal policy could benefit US mortgage-backed securities. It can sometimes be hard to tell whether the US housing market is hot or cold. Currently, existing-homeThis article was written byAllianceBernstein (AB)4.97K FollowersFollowAB is a research-driven investment firm that combines investment insight and innovative thinking to deliver results for our clients. At AB we believe that research excellence is the key to better outcomes and as a result we have built a global firm with exceptional research capabilities. We offer a broad array of investment services that span geographies and asset classes to meet the needs of private clients, mutual fund investors and institutional clients around the world.