Mustafa Chowdhury on Mortgage Risks, Fed Shocks and Derivatives
Macro Hive Conversations With Bilal Hafeez
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The Fed's Buying Another 500 Billion, 10-Year Treasury Equivalent
The interest rates have gone up from average mortgage, this where like 2.5% fat mortgage portfolios to a percent, 2.5%. So this increase of 350-400% will result in the homeowners' likelihood of refinancing their mortgages extremely low. This change in duration is essentially for Fed's 500-ish billion, 10-year treasury equivalent. It's the same as if Fed's just bought another 500 billion, 10 year treasuries without actually having to do that transaction.
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