Barclays Capital expects the Federal Reserve will continue buying Treasury securities past the second quarter, although it appears investors feel otherwise as there has been considerable sell-off in long-term bonds this week. Analysts said Treasurys rallied ahead of the Fed’s recent announcement of its latest round of purchases – the $600 billion bond-buying plan known as QE2. And investors claim inflation fears and demand for assets backed by the dollar, which are being hurt by calls from foreign officials to place less emphasis on American currency, are driving yields higher. But Barclays Capital said “the most likely reason is simply that investors have scaled back their expectations of (the) Fed purchase,” and volume was light this holiday-shortened week. Agency mortgage-backed securities underperformed their Treasury duration hedges this week, according to analysts, who recommend staying overweight in Agency MBS and “believe the best execution is in lower coupons.” Meanwhile, nonagency MBS prices climbed this week after some weakness last month, according to Barclays Capital. Still, the analysts don’t expect “any near-term pricing effects,” from banks repurchasing troubled loans out of MBS “except in pockets where buybacks are currently happening.” Write to Jason Philyaw.

Most Popular Articles

Quicken Loans hits “pause” on One Reverse Mortgage, moves all employees to Rocket Mortgage

Quicken Loans has become the largest mortgage lender in the country over the last few years due in large part to the growth of Rocket Mortgage, the company’s digital mortgage platform. As it turns out, Rocket Mortgage is becoming so big that it’s now consuming other parts of the Quicken Loans family of companies too, namely the company’s reverse mortgage lender.

Feb 21, 2020 By

Latest Articles

Realogy Brokerage Group emerges from company-wide consolidation

Realogy will be renaming NRT, the business unit that includes Corcoran Group, Sotheby’s International Realty and Coldwell Banker.

Feb 25, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please