Do we have a macro environment that's ambiguous or clear?
Scarlett Foo
Lindsay Rosner
Macro environment getting clearer. Today's data was clean. January is unambiguous - Fed will not be cutting in January.
Why is bond market not budging, stuck between 4.1-4.2%?
Scarlett Foo
Lindsay Rosner
Bond market dealing with ambiguity from government shutdown and stale data. Hard to have conviction until we see more data and know new Fed chair.
Would Trump's $200B mortgage bond plan move mortgage rates meaningfully?
Scarlett Foo
Lindsay Rosner
Estimates suggest could move mortgage rates lower by quarter percentage point, but won't bring tremendous amount of people off sidelines.
Lindsay Rosner
Difficult to have conviction on whether yields should be lower. We think steepener rates make sense.
How does this policy change your fixed income allocation?
Scarlett Foo
Lindsay Rosner
Makes mortgage space more interesting, particularly non-agency residential mortgage-backed securities.