Market Musings

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At the Half: 2025 is Well Off Last Season’s Pace, But Carry and Credit Remain Steady (7/1/25)

At halftime for 2025, the benchmark GSE CRT sector finished behind 2024’s first half in a number of respects. $4.5B in YTD sector issuance is 13% off last year’s pace, while float is down incrementally so far for the 3rd year in a row, now at $47.3B. Meanwhile, returns for H1 2025 have come in at 3.37%, well off 2024 H1’s 6.65% and far behind the same-period 9.19% from 2023’s record-setting year. For historical perspective, 2025 halfway returns are below the yearly mid-point average since the benchmark GSE CRT market’s inception back in 2013 of about 4%+... (Read more here)

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​​Lazy Days of Summer Ahead (6/2/25)

As the markets quickly approach the end of spring and the start of summer, GSE CRT looks to have settled into relatively lower-flying trajectory versus last year as sector spreads exhibit more beta movement, gross supply is now behind 2024’s historically leisurely pace, and deal composition is even more IG-heavy. Various aspects of the sector point to a continued modest risk/reward landscape heading towards the back half of the year... (Read more here)

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Defense At the Top and Bottom of the Stack (5/1/25)

The current risk and volatility weighing on the markets is a seemingly multi-dimensional enigma for relative value. Take the Treasury curve for example, which looks like someone sat on it in April. The belly is bowed as the short end remains held by the Fed, the longest 20-/30-year end has actually moved a little higher MoM, while 2s through 10s have bull-steepened, all as tariff/inflation worries clash with recessionary thoughts and interesting forward curves. In this type of market landscape, defensive positioning is likely the best way to get through the turmoil and in GSE CRT, the very top and very bottom of the capital stack may present the best places to hunker in... (Read more here)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GSE CRT Float: Memories of Times Past (4/1/25)

Benchmark GSE CRT outstandings currently sit at just over $49B as of March 2025, pretty much around the $49B-$50B float area the sector has seemed to have settled into since Q4 of 2023 as a number of influences, including tenders, GSE acquisition pace, and reinsurance levels have helped keep the volatility in benchmark GSE CRT supply technicals in check. But within the prevailing float, we still see a wide variety of issuance formats outstanding that span the CRT sector’s decade-plus old chronology... (Read more here)

 

 

 

 

 

 

 

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Steady As She Goes (3/3/25)

With the first two months of 2025 now in the rearview mirror, it looks like “steady as she goes” so far for GSE CRT as the sector’s 4 Cs of fixed income relative value trends keep rolling along...Amidst this current backdrop, relative value is mostly differentiated in respective tranche-type carry/convexity profiles... (Read more here)

 

Curve Remains Compressed (2/3/25)

With January in the books, the Treasury curve continues to remain relatively compressed. The term structure is holding within a 71bps band (T-Bills through the 30-year), though a little bit more “normal” versus Q4 of last year. The highest par-curve yield point had been the 4-week T-Bill at 4.76% back in November, but now it’s reverted to the 30-year at 4.83%. Meanwhile, the lowest point is now the 52-week T-Bill at 4.17%, making for a 71 bp range between high and low points on the curve, with all maturities still carrying a 4%-handle yield. The 2-year/10-year spread has now steepened out to 36bps, the widest spread since it “un-inverted” back in August... (Read more here)

 

 

 

 

 

 

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