Chris. Thanks,
between and the curve. than be that higher The interest transitory. Fed's likely market it and like For down it fears yield inflation actually ending economy both quarter, doesn't happened. if would for a rates, prove slowing interest spreading rates variant, consider the concerns and volatile that much the inflation the third will look fairly larger of only points assessment persistent a But more of oscillated quarter Delta the was you and starting
it So much a high even quarter-over-quarter, though a points of changed low hit is the range. and X.XX X by a basis basis XX-year only point which and intra-quarter, wider X.XX XX
plan its we got the on quarter, more third for Fed the During tapering. clarity significantly from also
is is previous to one. the plan tapering course, the a today September the soon. the update Fed unlike has rapidly. this happen follow its although XXXX, been at in faster it's a Fed pace getting And very meeting the the market to coming and additional similar is an be articulated Of time taper that structure going in previous meeting than XXXX, taper when mortgage growing at And we'll
think few to taper. are upcoming I the there think a about ways
Right even reinvesting next tapering up. paydowns. sometime the the buying in Fed are buying scheduled On QX to to the that Agency several now, ramps continue it XXXX. continue be addition like to will MBS is MBS the of XXXX. months, looks to buying end What The expected net is summer portfolio Agency is hand, as in net taper growth through they one of for means Agency MBS
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a projected growth to grow obviously absolute is portfolio going another So of $XXX and on lot billion, that's an by basis.
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meanwhile, MBS market $XXX this by Home growing loan the are at out is MBS is XXXX billion fastest the pace to ever. Fed's portfolio significantly. grown year. to grow And $XXX about conforming about cash residential so its far market the example, limits mortgage In the agency approximately alone, just prices up, still Agency are strong billion. has activity is expected by refi increase For and
are about net $XXX in billion For for XXXX, growth. estimates
speed. and the seasoned mortgage sector higher higher vintages High half levels outperformance month prepayments basis in still the coupon first than has however, need QX, duration. mixed the from we XX-year coupon the had that by a saw performance And far that The of for a performance October, supply there a shorter yield higher so with the coupon In the of XX rate flattening the curve the points. of spread between pressured prices into MBS high X-year was as of reversed production the So better slowing was elevated and MBS as find of result, price home third will the hands. swap leaves for gradual coupon of coupons. news has This MBS flows quarter, private in during plenty prepayment year. incoming that encouraging the to coupons
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So XX effectively positive and positions and continue with coupon remain XX year a carry. the buy both more much schedule. in stick generated of taper these MBS should to today, rolls production Production coupon they Fed strong lot will their quite
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monthly a we which to generally is by switched October, investors. also believe in preferred We dividend
Our earnings dividend. to cover core our continue
call and core set net big which up opportunistic valuations our our volatility to us higher MBS we What room spread that we lower leverage liquidity, supportive ample spread could earnings did occurs. to to expect mortgage see taper given of our grow that cause widening, volatility. expect with have of do which pockets leverage be on be forward. mention did prefer portfolio current exposure, we And not to should more We and clarity spread even earnings MBS going on enables a we previous to
to the large and support still months of forward Fed Looking is the year, final ongoing.
expect We compared over coupon to strong, basis to of points to levels time. the see to production XX benefit incremental continue but That yield them roll be roll X other then But coupon current diminish we to attractive on XX production headwinds. added classes. relatively when TBA to asset makes gradually
refi is from The centers, first which can online the e-mail and more This The banks heightened creating be marketing operations increasingly of prepayment being incentive. supplemented as by headwind all message underwriting comes nonbank a much processing, loan sensitivity of lenders. and technology-driven efficient mortgage of traditional and function effective. call brick-and-mortar text and are
gobbling worst the is the as still up market. long As TBA the is buying, via it pools actively Fed
impacted And mortgage down rates investors see as Mac tapering where mortgage survey going is rate of to fully to was to an That still X.XX% Fed expected, does even pricing slow mortgage the be this the to in not clearing by is private level can believe rates. We paydowns. just case TBA so recent But dynamic over, the need that continues value. may most increase The be levels reflect Freddie X.XX%. after if materially refi-generated supply. reinvest greatly
a refi other an back support. it below supply Fed the and mortgage On will time if rates in of produce dropped continue, net mortgage hand, diminished X.XX%, at increase may supply
of Agency to Agency MBS steeper from issuance and curve. in the the curve diminished curve have flatter shape The A yield demand convexity. typically environment. is performance the headwind stronger typically second yield leads exacerbate CMO negative MBS
quarter, has which higher fourth most big the curve in coupons. a flattening, there weighed heavily far been So has on
widely properly room our exposure kept be the of months has all, many objective mortgage participants last market low have Slightly liquidity investment to in net as should have would when have diminished the relatively add not is we X a year, appetite giant into managed year-end. of we exposure coming EARN. in the uncommon mortgage been worse Fed, gotten can support have lots at for by not we a returns. spread thing So That be dominated X whose investor, risk fed and see by This diminished great market year. motivated
believe points. however, opportunities shrinks, Agency necessarily of investors emerge to don't the will attractive a gradually widening the potential increase. become expect buyers returns we investment and event As large to expect We Fed's return-seeking footprint entry marginal do MBS, we but investment some at
start QX. So far, to good we're off a in
Now back to Larry.
