Fed currently holds $884 billion in mortgage-backed securities which negatively targets our margins. When Federal Reserve finally sell their MBS, will that drive our margins back up? Perhaps pushing our stock back over $20?
Not sure I agree. The Fed holds MBS that has a CPR of about 10%. Once they stop buying (if ever) they will allow CPR to erode the balances to zero. We will likely never see the Fed purchased MBS back on the open market. IMO.