Comment Comment by rsync "97% of these MBS were 10+ year duration, with a weighted average yield of 1.56%."I'd like to learn more about the dramatic drop in MBS - elsewhere, downthread, it is asserted that they have dropped 30-50% ?I understand the inverse relationship between bond price and yield ...... but I am surprised that an asset yielding ~1.5% drops 30% in value when treasuries of similar duration rise to 3-4%.Are there other factors at play with MBS in early 2023 - such as increased delinquencies - that are putting downward pressure on their price ? parent rsync 3 years ago
I'd like to learn more about the dramatic drop in MBS - elsewhere, downthread, it is asserted that they have dropped 30-50% ?
I understand the inverse relationship between bond price and yield ...
... but I am surprised that an asset yielding ~1.5% drops 30% in value when treasuries of similar duration rise to 3-4%.
Are there other factors at play with MBS in early 2023 - such as increased delinquencies - that are putting downward pressure on their price ?