What Are Mortgage-Backed Securities MBS?
Before MBSs, only banks had significant enough deposits to make long-term loans or the capacity to wait until these loans were repaid decades later. MBS spreads—the difference between interest rates sellers must pay investors and 10-year Treasurys—grew to almost double their pre-pandemic levels in 2022 to 2023, though in the mid-2020s, those spreads began to …