our an heading end. call. quarter, activity financial on and performance. morning Today, you and macroeconomic landscape, this discuss our earnings our portfolio financial quarter will Ilker joining update our Good for the thank us Sean. you, positioning then Serena year and on Thank I and into will provide results third all
levels. year and elevated high mortgage what in Now, put brought inflation spreads quarter rapid and return market historically economic weighed market a this the be the of experienced history crisis perspective, was further total financial negative the readings, about year, Bloomberg financial sell-off Reserve a And the light Annaly U.S. conditions, XX.X% three geopolitical difficult beginning previous aggregate sustained worse have in to backdrop volatility, in of negative the return first index. negative and a this markets have Persistently for in rising to Federal tightening X.X% of macro of in the that in the bond historical with the on continues the in environment, risks XXXX, era the quarter. the index turmoil, challenging third of worst heavily XXXX, than bond for continuation rate XX.X% quarters hikes, the widened stability far
monetary its continue it of to end and fed since Reserve Now, a tightening the expecting interest that to target, determined at echoed August. exceptionally has nearly markets expectations Chair Federal that has until of Hole commitment at in meaningful the is X.X% the Jackson led sharp Fed a compared rate inflation rate Funds rates approaches to has caused of hiking at high the virtually This the has all speakers speech X% of with a cycle June volatility. currently end to just Powell’s been of repricing levels a sell-off signaled policy path end of by
weak extremely particularly of A products, been investor for agency income has fixed demand MBS. volatility consequence for
In contributing in MBS and begun Thursday, banks in XX peaked critical sharp sector in last rate and third of Mac very parts activity. primary quarter has in Freddie time slowdown funds the their appreciation to MBS reverse widening for fact, holdings many housing light holders the in and rose more likely rates abrupt reduced to X.XX% in loans the of have the as the country. mortgage the private to to than course In cycle mortgage Home mutual XXXX spreads, in market which third sell-off doubling of years the the securities only price of agency represents simultaneously. past and and
mortgage the rising affordability to the this early mid-XXXX. from expect Given entire potentially housing we rates, high now and shock year market by prices to home the seen correct erasing rapidly appreciation
on meaningfully Now, highs, unlikely homeowners default are standards although substantial recent been given markets lending built low prices here. the cushions, considerably could weakened equity to labor up from unless rates homeowners have existing conservative, fall from have mortgages,
as funding healthy remain Now, agency despite conditions MBS markets, volatility mortgage credit and to residential MSR continue interest repo, be facilities and available. in rate readily
certainly, risen benchmark are with have interest rates financing commensurate short-term other Our but rates.
we could Fed the While reserve products best its portfolio runoff ample. should The billion seen have haircuts, to elevated thus reaching of Reserve month, notwithstanding and remains are and up limited increase at seen of driven far. run-rate steady cash the an high rate volatility this short-term of support repo per financing drive financing bank balances conditions Federal repo favorable by balances state in maintain and $XX interest cash the investor reverse conditions as participation evidence high by
our and Now, shifting liquidity, is our our portfolio, on environment. to leverage risk profile managing the in focus current prudently
liquidity agency of sustained cash of $X our XX% which ourselves $X.X including and strong than position equity in end. defensively MBS, and quarter We assets, over more represents billion continue given with volatility unencumbered common in billion to have as
to X.X at sharp last quarter turns the mid-September During market the the our the off sell X.X at maintained when end turn economic quarter over brought up until leverage turns. our weeks leverage of X.X the X quarter, we roughly
modestly portfolio we of to capital target with leverage over our expect our we lower the allocation. longer current comfortable trend our reflective term positioning, While are
modestly common we mix, selectively quarter. to portfolio our With with respect three as increasing strategies the assets we capital each issuance of to grew $XX.X on from equity deployed billion the total
increase the to leverage majority end to XX% as the sector points agency, the our percentage was the the capital to X new absorbed of While quarter. agency the capital to of majority portfolio in committed allocation decreased vast
residential we inception to April whole and Though that billion this been weakness stringent already susceptible whole in which home in was fundamentals, This expect of XXXX. non-bank largely additions well deteriorating believe pace this was of And recently largest quarter. to remain securitizations in declines. credit our moderate Nevertheless, achieved of correspondent to our sector, we jumbo over near-term. credit, MBS result in Turning channel, loans housing since in less opportunistic has the of housing a our loan to aggregated the prime further of growth have $X the tightened loan issuer expanded positioned standards. credit we withstand are price on portfolio light market focused portfolio securities we
portfolio further Now, year-over-year. to we stable with more the The from fully scaled and risks flows portfolio benefits the have mortgage the our MSR servicing respect our helps hedge to of having housing tripled in low environment rights activity. our platform slowdown than cash business, prepayment in size now
the Although to and sector’s the measured we we second largest to be with were growth, risk expect as purchaser future consider respect the end of attractiveness relative of parameters. XXXX the in our quarter, of MSR to
take are subsides, three improves, additional we our are liquidity our near-term will persist across anticipate defensive advantage investment historically we turbulence. Now, to against preserving of strategies across well spreads businesses. And attractive. until and positioned on and maintain will the focused opportunities while challenges Again, are market the optionality overall, outlook market posture our volatility over we when
I most capital our dislocation at we Annaly financial the Now wanted immensely we provide lastly, a financial tantrum, of We of turbulence has period off some been the XXXX take model the period XXXX, to that before a to stronger episodes moment our recently navigate crisis, resilience perspective from such as the markets. to reminded challenging through onset of long-term where numerous it market We ever. are market today. that market will XX Annaly’s handing this than an as Ilker, understand confident throughout taper and events, proven volatile I emerge in was on in business years ability and marked to company current has financial sit public these successfully recently, XXXX and COVID.
provide that activity the Ilker detailed a our more with of and quarter overview each will business. Now, outlook for for portfolio
