Cryptocurrency Q&A What happens to MBS when interest rates fall?

What happens to MBS when interest rates fall?

alexander_smith_musician alexander_smith_musician Mon Sep 23 2024 | 0 answers 0
Could you please elaborate on the impact of declining interest rates on mortgage-backed securities (MBS)? Specifically, how do they respond to such changes, and what mechanisms underlie this reaction? Are investors typically incentivized to purchase MBS when interest rates decline, and if so, why? Also, how might the performance of MBS compare to other fixed-income assets during periods of falling interest rates? What happens to MBS when interest rates fall?

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