MBS Market
Banks Swap Roles With Money Managers in $8 Trillion Mortgage Bond Market
- Agency MBS volumes fell to the lowest since 2018 last year
- Banks are sidelined but money managers are jumping in
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Trading of mortgage bonds fell back to earth last year, as banks cut back on buying and higher mortgage rates halted the stampede of households that rushed to refinance their mortgages in 2020 and 2021.
Traded volumes of agency mortgage backed securities fell about 14%, according to Trace data compiled by the Securities Industry and Financial Markets Association. That was the lowest since 2018.