MORTGAGE MOVEMENT

Since the start of the Iran engagement, 30-year mortgage rates have meaningfully risen. Surging oil prices and uncertainty about the duration/ramifications of the hostilities on inflation/growth/unemployment etc. have put upward pressure on overall interest rates and have also significantly increased interest rate volatility. Higher interest rate volatility generally causes mortgage-backed securities (MBS) to rise relative to Treasuries because of the embedded prepayment option in the mortgages backing MBS.