TREE NEWS reports: Investors pulled money from US mortgage bond funds over the past three weeks at a pace ranking among the seven worst since the start of 2021, as surging interest rates drove capital out of volatile assets. The Bloomberg US Mortgage-Backed Securities Index posted its second-worst September on record. The selloff followed Treasury yields climbing to multi-decade highs, driven by soaring oil prices, inflation concerns and expectations of Fed rate hikes.
US mortgage bond funds see one of worst outflows since early 2021
AI take
The scale of the outflow matters less than its timing: it lands as Treasury yields hit multi-decade highs, so this reads as rate-driven de-risking rather than mortgage-credit-specific stress. Mortgage bond funds sit at the intersection of housing and rates, and sustained redemptions there can feed wider spreads and tighten conditions for the sector. Whether the selling broadens beyond rate-sensitive funds, or reverses once yields stabilize, is the open question.
Generated by AI for reference only.
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