If the Fed tries to drive down interest rates any further won't it cause REITs like AGNC and ARR to get a smaller spread between what they pay for interest and what they get? Their short term borrowing isn't going to get any lower as the Fed. is already down to 0.25% However, the interest they will get for newly purchased MBSs from Fanny Mae will decline and thus they will have to lower their dividend. My concern is that this will cause the stock price do decline. Or will it? Anyone have an idea of what the stock price might do if the Fed announces a twist strategy?
On the positive side I will certainly refinance if interest rates decline any further. I am now at 3.25% and would refinance at 2.75% and below.