Financial Data and Key Metrics Changes - The company's book value per share increased by 5% from $19.25 in the prior quarter to $20.21 as of December 31, 2025 [19] - Earnings Available for Distribution (EAD) rose marginally to $0.74, exceeding the dividend for the quarter [7][20] - Economic return for Q4 was 8.6%, bringing the full-year economic return to 20.2% [19][20] Business Line Data and Key Metrics Changes - The agency portfolio ended 2025 at $93 billion in market value, an increase of nearly $6 billion quarter-over-quarter and $22 billion year-over-year [8] - The residential credit portfolio reached $8 billion in market value, up $1.1 billion quarter-over-quarter, representing approximately 19% of the firm's capital [10] - The mortgage servicing rights (MSR) portfolio ended the fourth quarter at $3.8 billion in market value, a nearly $280 million increase quarter-over-quarter and a 15% increase year-over-year [13] Market Data and Key Metrics Changes - Fixed income markets exhibited strong performance, contributing to the highest total return in the U.S. aggregate bond index since 2020 [5] - The yield curve steepened during the quarter as short-term yields fell while long-term yields rose modestly [5] - Swap spreads continued to widen, supported by a shift from Quantitative Tightening to balance sheet expansion by the Fed [6] Company Strategy and Development Direction - The company aims to increase its allocation to residential credit and MSR, targeting a long-term weighting of 50% agency, 30% residential credit, and 20% MSR [46][47] - The diversified housing finance model is expected to continue performing well for shareholders, with a focus on opportunistic investments in the current coupon MSR market [18] - The company remains well-positioned to benefit from growth in the non-QM market and the broader non-agency market [13][17] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains solid, with the labor market showing signs of softness but limited layoffs [4] - The company anticipates continued strong results from its investment strategies in 2026, supported by favorable market conditions [16][18] - Risks include global fiscal challenges and potential changes in housing policy that could impact the agency markets [39][40] Other Important Information - The company raised $560 million of common equity through its ATM in Q4, bringing total equity raised in 2025 to $2.9 billion [8] - The economic leverage ratio remained low at 5.6x, down from the previous quarter [22] - Total assets available for financing reached approximately $9.4 billion, providing significant liquidity and flexibility [23] Q&A Session Summary Question: Update on mark-to-market book values - The book value was up 4%, inclusive of the dividend accrual, with a slight increase noted [25] Question: Portfolio returns and comfort level with the dividend in 2026 - The company expects mid-teens returns and feels confident about the durability of the swaps market as a hedge [26] Question: Insights on the MSR portfolio and current coupon MSR - The company is now active in the MSR exchange platforms and is well-positioned to manage recapture effectively [27][29] Question: Impact of potential G-fee cuts on prepayment environment - A G-fee cut on purchase loans is seen as appropriate, but broad cuts could negatively impact the MBS market [31] Question: Factors that could change the current low-risk environment - Risks include global fiscal issues and asset market euphoria, which could lead to corrections [39] Question: Attractiveness of buying lower-coupon MBS - The valuation on low-coupon MBS is tight, and better ways to manage risk are available [41] Question: Likelihood of GSE portfolio caps being increased - The current capacity is far from hitting caps, and future increases remain uncertain [48]

An Indian government panel has proposed a sharp reduction in the share of food prices used to determine retail inflation, a move that could help the central bank conduct monetary policy more effectively https://t.co/8R1UBanKQU ...

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. U.S. equity markets experienced a quarter supported by optimism around potential monetary easing and caution related to economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment cooled l ...

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. U.S. equity markets experienced a quarter supported by optimism around potential monetary easing and caution related to economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment cooled l ...

Core Viewpoint - Long-dated U.S. Treasury yields have risen as the market digests the outcome of the recent Federal Reserve meeting, indicating a reassessment of monetary policy [1] Group 1: Treasury Yields - Short-dated U.S. Treasury yields have declined, while yields on maturities of 10 years or longer have increased [1] - The 10-year Treasury yield rose above 4.26%, reflecting market adjustments following the Fed's decision to maintain interest rates [1] Group 2: Federal Reserve Meeting Impact - The Federal Reserve emphasized economic resilience, which has alleviated concerns regarding inflation and employment [1] - Policymakers have countered aggressive easing expectations, thereby supporting U.S. rates despite the dollar's struggle to regain momentum [1]

About CLEAR The Federal Reserve Act of 1913 requires each of the Reserve Banks to operate under the supervision of a board of directors. Each Reserve Bank has nine directors who represent the interests of their Reserve District and whose experience provides the Reserve Banks with a wider range of expertise that helps them fulfill their policy and operational responsibilities. The directors of the Reserve Banks act as an important link between the Federal Reserve and the private sector, ensuring that the Fed ...

Group 1 - The Federal Reserve announced that it will maintain the federal funds rate target range at 3.5% to 3.75%, aligning with market expectations [1] - The Federal Open Market Committee (FOMC) indicated that current indicators show the U.S. economy is in "robust expansion," but uncertainty regarding the economic outlook remains high [1] - Employment growth continues to be sluggish, with some signs of stabilization in the unemployment rate, while inflation remains at elevated levels [1] Group 2 - Fed Chairman Jerome Powell stated that future monetary policy decisions will be based on new data, with 10 out of 12 FOMC members supporting the decision to maintain rates [2] - Powell mentioned that the current federal funds rate is generally "neutral," and core inflation in the U.S. is expected to reach around 3% by December [2] - If inflation peaks and begins to decline as previously anticipated, the Fed may consider easing monetary policy, especially if the labor market does not stabilize [2] Group 3 - Powell advised the next Fed chair to avoid involvement in electoral politics, emphasizing the importance of maintaining the Fed's independence [3] - The market currently estimates an 88.6% probability that the Fed will keep interest rates unchanged at the next monetary policy meeting, an increase from 82.7% the previous day [3]

Investment Rating - The report indicates a positive outlook for the global housing market, with an average annual nominal growth of 2.4% across 55 markets in Q3 2025, signaling a modest improvement in pricing conditions [2][6]. Core Insights - Global house price growth strengthened in Q3 2025, with a rise to 2.4% from 2.2% in Q2, marking the highest growth since Q1 2024. This growth is supported by a shift in monetary policy, with central banks implementing 27 net rate cuts and no hikes during the quarter [2][3][6]. - Turkey leads the index with a nominal annual growth of 32.2%, although real growth is negative at -0.8%. Other notable markets include North Macedonia (25.1%) and Portugal (17.7%), with a significant presence of European markets in the top rankings [3][4]. - Despite nominal growth, global real house price growth remains slightly negative at -0.1% year-on-year, indicating that inflation continues to impact purchasing power and affordability [5][6]. Market Analysis - In Q3 2025, 86.3% of tracked markets experienced positive annual growth, reflecting a gradual improvement in market momentum [4][6]. - The report highlights that a sustained improvement in real growth will require further policy support and a clearer reduction in price pressures, as current nominal gains are not translating into real benefits for consumers [5][6].

Core Viewpoint - The Federal Reserve has paused interest rate cuts after three reductions, with expectations for potential future cuts depending on economic data and labor market conditions [1][2][3]. Interest Rate Decisions - The Federal Reserve has cut rates by a total of 175 basis points since September 2024, with the current Fed funds rate just below 3.65% [1]. - There is a consensus among some economists that two more cuts may be appropriate to bring rates down to the low 3% range [2][3]. Economic Indicators - Progress on services inflation is viewed as significant, and there is a focus on labor market weaknesses without immediate panic regarding inflationary factors [3][4]. - Current job data appears strong, but recent layoffs from companies like Amazon and UPS raise concerns about potential future job market weaknesses [9][12]. Federal Reserve Independence - The importance of the Federal Reserve's independence from political influence was emphasized, as it is crucial for maintaining the institution's credibility and serving the public interest [15][17]. - Dissent among Federal Reserve voters is noted, with some advocating for rate cuts despite positive economic indicators, indicating differing views on monetary policy [18][20].

Group 1 - The effects of tariffs have significantly influenced goods prices, with most price increases attributed to tariffs rather than demand, which is a more complex issue to address [1][2] - Core PCE inflation is slightly above 2% when excluding the impact of tariffs on goods, indicating a stable inflation environment, while disinflation is observed in service categories, which is a positive sign [3] - It is expected that the impact of tariffs on goods prices will peak and then decline, provided there are no new major tariff increases, which could allow for a loosening of monetary policy [4] Group 2 - The labor market's stabilization is crucial; if downside risks reemerge or data worsens, it will necessitate a reassessment of economic policies [5] - The potential appointment of a new Federal Reserve chairman by President Trump before May raises questions about the transition period and collaboration, but specifics remain uncertain [6]