For more, let's bring in our next guest who was among the final four in consideration for the job and for a time was widely viewed as the front runner. NEC director Kevin Hasset joins us now. Director Hasset, thank you so much for joining us.>> Great to be here. >> Are you disappointed that you didn't get it. >> Oh, no. No.I I've got my dream job. You guys have been seeing me say that for months. Uh I think President Trump made a great choice and I'm really thrilled and humbled by all the kind things he sai ...

President Donald Trump nominated former Federal Reserve Governor Kevin Warsh on Friday morning to be the next Federal Reserve chair, indicating a possible shift the direction of U.S. monetary policy. If confirmed by the Senate, Warsh, 55, will replace Fed Chair Jerome Powell once his term is up in May, and oversee a 12-member Federal Open Market Committee that has been divided about the pace of interest rate cuts. Warsh has aligned with Trump in urging lower interest rates and criticizing the Fed. "I h ...

President Donald Trump nominated Kevin Warsh as Chairman of the Federal Reserve on Friday, selecting a candidate who views bitcoin as a strategic tool for central banks rather than a threat to the financial system or a competitor to the dollar. Warsh noted in a Hoover Institution interview last year that price movements can indicate when the Federal Reserve is mismanaging the economy or ignoring inflation signals. “I think it can often be a very good policeman for policy,” Warsh said. Trump announced t ...

Financial Data and Key Metrics Changes - Financial conditions improved during the quarter, supported by two Federal Reserve rate cuts, solid corporate earnings, and strong economic growth [4] - Book value per common share increased by 3.7% to $8.72, resulting in an 8% economic return for the quarter [7] - The liquidity position remained robust with $453 million in unrestricted cash and unencumbered assets [8] Business Line Data and Key Metrics Changes - The Agency mortgage portfolio was valued at $5.4 billion, while the Agency CMBS portfolio was $900 million [8] - Agency RMBS investments increased by 11% quarter over quarter, focusing on 5% and 5.5% coupons [18] - Agency CMBS risk premiums remained largely unchanged, with no new purchases made during the quarter [21] Market Data and Key Metrics Changes - Interest rates were generally stable, with the 10-year Treasury yield ending the year at 4.17%, 40 basis points lower than the start of the year [10] - The yield curve steepened, benefiting longer-term investments such as Agency RMBS and Agency CMBS [11] - The TBA dollar roll market showed notable improvement, indicating strong demand for Agency mortgage collateral amid limited net supply [16] Company Strategy and Development Direction - The company remains positive on Agency mortgages, anticipating favorable conditions due to lower interest rate volatility and expectations for broadening demand [9] - The strategy includes focusing on specified pools with lower loan balances to enhance predictability of future cash flows [19] - The company plans to selectively access the ATM for capital raising when conditions are favorable [42] Management's Comments on Operating Environment and Future Outlook - Management noted that while near-term risks are balanced, the current environment of low volatility in interest rates and spreads is expected to provide a positive backdrop for Agency mortgages [26] - The conclusion of quantitative tightening and the announcement of T-bill purchases by the Fed are seen as tailwinds for the company's strategy [25] - Management expressed confidence in the liquidity position, providing a cushion for potential market stress [26] Other Important Information - The Federal Reserve ended its quantitative tightening program, which had reduced its Treasury and Agency mortgage holdings by over $2.2 trillion since mid-2022 [5] - The company modestly increased leverage to 7 times, consistent with the constructive investment environment [7] Q&A Session Summary Question: Can you talk about your approach to leverage level post the tightening and where you are finding value within the coupon stack? - The company increased leverage slightly in the fourth quarter due to a positive environment, and is comfortable with current levels despite tighter spreads [30] - Good value is being found primarily in the 3.5% to 5.5% coupon range [31] Question: Have you seen any surprises within prepay reports in the specified pool portfolio? - No significant surprises were noted; prepayment speeds increased in higher coupons but were less impacted due to prepayment protection [33] Question: Have you continued rotating down in coupon with new capital invested? - The company is focusing on lower coupons for future purchases, particularly in the belly of the coupon stack [36] Question: Can you talk about your capital structure and ability to raise capital going forward? - The company feels it is in a better place regarding capital structure and selectively accesses the ATM when beneficial to shareholders [42] Question: How should we think about book value sensitivity and overall upside to further spread tightening? - The magnitude of change in book value to spread changes remains the same, but expectations for further spread tightening are reduced [56]

Financial Data and Key Metrics Changes - Financial conditions improved during the quarter, supported by two Federal Reserve rate cuts, solid corporate earnings, and strong economic growth [4] - Book value per common share increased by 3.7% to $8.72, resulting in an 8% economic return for the quarter [7] - The liquidity position remained robust with $453 million in unrestricted cash and unencumbered assets [8] Business Line Data and Key Metrics Changes - The agency mortgage portfolio was valued at $5.4 billion, while the agency CMBS portfolio was $900 million [8] - Agency RMBS investments increased by 11% quarter over quarter, focusing on 5% and 5.5% coupons [18] - The agency CMBS allocation declined modestly due to growth in the overall portfolio, despite no new purchases [21] Market Data and Key Metrics Changes - Interest rates were generally stable, with the 10-year Treasury yield ending the year at 4.17%, 40 basis points lower than the start of the year [10] - The yield curve steepened, benefiting longer-term investments such as agency RMBS and agency CMBS [11] - Agency mortgages delivered strong performance, driven by reduced interest rate volatility and robust demand from money managers [13] Company Strategy and Development Direction - The company remains positive on agency mortgages, anticipating favorable conditions due to lower interest rate volatility and expectations for broadening demand [9] - The strategy includes a focus on specified pools with lower loan balances to enhance predictability of cash flows [19] - The company plans to selectively access the ATM for capital raising when conditions are favorable [42] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment is supportive, with expectations for additional Federal Reserve rate cuts through 2026 [6] - The company views near-term risks as balanced, with a positive outlook for agency mortgages due to favorable supply and demand technicals [26] - Management highlighted that the current environment reflects a more normalized investment landscape, providing attractive levered returns [25] Other Important Information - The Federal Reserve ended its quantitative tightening program, which alleviated funding pressures and improved repo spreads [12] - The company reported a 4.5% increase in book value since year-end through the week of the call [25] Q&A Session Summary Question: Can you talk about your approach to leverage levels post the tightening and where you find value within the coupon stack? - Management indicated that leverage was modestly increased in Q4, reflecting a positive environment, and they are comfortable with current levels despite tighter spreads [30] Question: Have you seen any surprises in prepayment reports within the specified pool portfolio? - Management noted no significant surprises, with prepayment speeds in higher coupons increasing but less impacted due to prepayment protection [33] Question: Have you continued rotating down in coupon with new capital invested? - Management confirmed a focus on lower coupons, particularly in the 3.5-5.5 range, due to attractive conditions in the TBA dollar roll market [36] Question: Can you discuss your capital structure and ability to raise capital going forward? - Management expressed confidence in their capital structure, indicating selective access to the ATM when beneficial to shareholders [42] Question: How should we think about book value sensitivity and overall upside to further spread tightening? - Management stated that while the magnitude of change in book value to spread changes remains the same, expectations for further spread tightening are reduced [56]

ToplinePresident Donald Trump announced Friday his pick for the Federal Reserve chair is Kevin Warsh, a former central bank official-turned-critic and aide to former President George W. Bush with familial ties to a longtime billionaire Republican donor. Warsh has claimed the Federal Reserve’s monetary policy “has been broken for quite a long time.” Copyright 2014 AP. All rights reserved.Key FactsWarsh, 55, earned a law degree from Harvard University in 1995 before becoming a banker at Morgan Stanley, where ...

President, as you just said, announcing moments ago that uh uh former Fed Governor Kevin Worsh will be his pick for nominee. That concludes a very monthsl long process. I began back in in the summertime.There's a picture of Kevin Worsh. Uh uh he was, as you said, at Dukane Family Office partner going back to 2011. uh work working with famed investors Stanley Ducken Miller uh governor from uh 2006 2011 and a special assistant to George Bush uh in 2002 and 8.Um he's been a sharp critic as you know Joe of uh t ...

Group 1 - Kevin Warsh's nomination as Fed Chairman is controversial due to his past performance during the financial crisis, which raises questions about his judgment and suitability for the role [1][5][14] - Warsh is perceived as a traditional Republican aligned with Wall Street, contrasting with President Trump's populist approach, leading to skepticism about his fit within the current administration [3][5][7] - The nomination process may face delays due to ongoing investigations into the Fed and Jerome Powell, indicating a potentially contentious confirmation [19][20] Group 2 - Warsh's economic views emphasize inflation control over employment, which could lead to restrictive monetary policies that may not align with the current administration's goals [11][14][22] - The labor market is showing signs of fragility, with slow wage growth and minimal increases in aggregate hours, suggesting a challenging economic environment ahead [22][23][24] - There is uncertainty regarding how Warsh's policies will impact nominal GDP growth, with projections indicating a potential growth rate of around 4% or lower [22][23]

Normally, in any month that the FOMC meets, the Committee’s decision on what, if any, changes they make to monetary policy is the focal point of the markets. Investors, Analysts and Fed Watchers, including myself, parse the Fed’s policy statement and the ensuing pressMichael Gray has devoted his career to following the capital markets and managing fixed income assets. He founded Gray Capital Management LLC and before that was Head of Taxable Fixed Income at Fidelity Investments. Michael has an MBA in Financ ...

Economic Indicators - The U.S. Producer Price Index (PPI) for Final Demand in December is expected to show a growth of 0.2 percent, consistent with the previous month [2] - The Chicago PMI for January is anticipated to be 43.8, slightly up from December's 43.5 [3] - The Baker Hughes Rig Count for North America was 775 in the prior week, with the U.S. rig count at 544 [3] - The Agriculture Department's Farm Prices for December showed an increase of 3.8 percent in the prior month [3] Market Performance - Major U.S. stock indices finished broadly down, with the Dow up 55.96 points (0.1 percent) at 49,071.56, while the S&P 500 closed down 9.02 points (0.1 percent) at 6,969.01, and the Nasdaq down 172.33 points (0.7 percent) at 23,685.12 [2][7] - Asian stocks ended mostly lower, with China's Shanghai Composite index falling 0.96 percent to 4,117.95 and Hong Kong's Hang Seng index tumbling 2.08 percent to 27,387.11 [5] - The Australian benchmark S&P/ASX 200 dropped 0.65 percent to 8,869.10, marking a third consecutive session of losses [6] Federal Reserve Commentary - St. Louis Fed President Alberto Musalem is scheduled to discuss U.S. monetary policy at a luncheon [4] - Fed Vice Chair for Supervision Michelle Bowman will speak on monetary policy and regulation at an assembly for bank directors [4]