"MBS REITS make money from favorable interest rates spread.." "they borrow at low rates and lend in the mortgage markets @ higher rates,...".
I have tried to educate myself by reading a lot of articles to understand "the spread" of which 2 rates? Is it the spread between Fed Fund rate (borrowing) and 10 yrs Treasury (lending)? Or is it between 2 yrs and 10 yr Treasury? Or between Fed Fund rate and 30 yr mortgage fix rate? Or...??? I still can not figure it out. If some one would kindly educate me please. Appreciate it very much.
Just to keep it simple, the spread between 2-year and 10-year treasury bonds is often used. You can find that at Daily Treasury Yield Curve Rates. For actual NLY spreads, go to the latest (March 31) 10-Q. Page 13 has the weighted average return on investments and page 27 has the cost of funds.