Why MBS Spreads Are Tightening Despite Fed Rate Uncertainty

Episode 35 dives into mortgage-backed securities, a corner of the bond market that's been quietly outperforming Treasuries in mid-2026. Lucas and Luna unpack why agency MBS spreads have tightened to post-2022 lows, how the Fed's runoff cap is creating a technical squeeze, and what this means for yield-hungry investors. With the 10-year Treasury around 4.47 and the 30-year near 5%, they ask whether MBS still offer enough compensation for prepayment risk. Specific numbers discussed: the current dollar roll premium in TBA contracts and the option-adjusted spread on current-coupon GNMA securities. #MBS #MortgageBackedSecurities #AgencyMBS #TBA #GNMA #FreddieMac #FannieMae #PrepaymentRisk #OptionAdjustedSpread #FedRunoff #QuantitativeTightening #TreasuryYields #10YearYield #30YearYield #YieldSpreads #FixedIncome #BondInvesting #FexingoBusiness Keep every episode free: buymeacoffee.com/fexingo