2026 前瞻展望（MBS）：全速启动-中期选举、美联储政策与高节奏将塑造 2026 年机构 MBS-2026 Year Ahead Outlook (MBS)_ Off to the races_ midterms, Fed policy and fast speeds to shape Agency MBS in 2026

Summary of the 2026 Year Ahead Outlook for Agency MBS Industry Overview - The report focuses on the Agency Mortgage-Backed Securities (MBS) market and its outlook for 2026, influenced by macroeconomic factors, government policies, and Federal Reserve actions. Key Points and Arguments 1. Government Influence and Policy Outlook - The upcoming midterm elections are expected to drive the administration to prioritize housing affordability, potentially leading to lower mortgage rates [1][44] - The Federal Reserve's leadership change may result in a more dovish policy stance, with expectations of three rate cuts in 2026 [1][26] 2. Market Sentiment and Investment Strategy - A cautiously optimistic sentiment prevails, with a basis overweight maintained despite anticipated near-term volatility due to policy and prepayment risks [2][49] - Investors are advised to carefully select their positions, particularly favoring the belly of the coupon stack to minimize prepayment risk [4][49] 3. Prepayment Risk - Prepayment speeds are expected to increase, potentially exceeding pandemic levels by 10-15%, driven by various factors including borrower willingness and AI-enhanced lender efficiency [3][49] - Policy risks related to Loan Level Price Adjustments (LLPAs) and alternative credit scores are highlighted as significant uncertainties for 2026 [3][49] 4. Supply and Demand Dynamics - Projected gross issuance for 2026 is estimated at $1.35 trillion, a 5% increase year-over-year, with net issuance expected to reach $244 billion, an 18% increase [5][49] - Demand is anticipated to be supported by money managers and potential GSE (Government-Sponsored Enterprises) buying, although bank interest may be moderate [5][49] 5. Housing Market and Affordability Initiatives - The administration's focus on housing affordability may lead to initiatives such as declaring a Housing Emergency, which could facilitate regulatory easing and potentially lower mortgage rates [44][47] - Discussions around GSE reform and adjustments to LLPAs are expected to continue, with implications for mortgage affordability and market dynamics [48][49] 6. Investor Survey Insights - The annual investor survey indicates a split sentiment, with 54% of respondents reporting a neutral MBS allocation and 44% overweight, reflecting cautious optimism [50][53] - A significant majority (87%) of respondents expect GSEs to be net buyers in 2026, with many anticipating a Housing Emergency declaration to trigger further buying [60][70] 7. Economic Forecasts - Economic forecasts suggest a stable unemployment rate around 4.5% and a gradual decline in Fed Funds rates to a terminal range of 3.0%-3.25% by the end of 2026 [26][49] - The primary mortgage rate is projected to remain around 6.25%, with expectations of prepayment risk returning at lower rates [89][49] Additional Important Insights - The report emphasizes the importance of macro and political drivers in shaping the MBS market in 2026, with potential surprises from government initiatives being a key factor for investors [49][50] - The sentiment around the housing market remains cautious, with a focus on affordability and the potential for regulatory changes impacting supply and demand dynamics [44][49] This comprehensive outlook provides a detailed analysis of the Agency MBS market, highlighting the interplay between government policy, economic conditions, and investor sentiment as key determinants of future performance.