Aug
10
Fed Taper Plan Brings Risk to Mortgage Debt Unseen in Treasuries
By-
Central bank may purge mortgages, keep some sovereign bonds
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U.S. 30-year fixed home-loan rate has risen from record low
For all the talk that Janet Yellen’s plan to shrink the Federal Reserve’s balance sheet will hurt Treasuries, U.S. mortgage bonds face a bigger test.
The securities are already lagging behind Treasuries for the first time since 2011. Investors are demanding 29 basis points of extra yield to buy the bonds instead of Treasuries, with the spread almost tripling from 2016’s low, based on Bloomberg data. Firms including Allianz Investment Management and Federated Investors say the spread widening probably isn’t over…
Fed Taper Plan Brings Risk to Mortgage Debt Unseen in Treasuries
