Mortgage Investors Bracing For Fed’s Taper May Be Disappointed
- Lower coupon MBS that the Fed buys may perform better
- So far this year, those securities have been lagging
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The best mortgage bonds to buy now may be the ones the Federal Reserve is purchasing, because the securities might benefit the most if macro optimism fades.
So far this year, some investors have been growing more hopeful about an economic recovery as a new U.S. stimulus package is rolled out. This has markets looking for any positive macro signs that may translate to the Fed tapering its direct purchases of mortgage bonds, according to a recent Bank of America report.