Agency Update

August 30, 2021



Full FDA approval of Pfizer’s COVID-19 vaccine seemed to calm market jitters from the week before last, and the risk-on tone pushed stocks to new record highs and the 10-year Treasury yield back above 1.30%.  Fed Chair Jay Powell’s highly anticipated Jackson Hole speech largely confirmed market consensus regarding the timing of the Fed’s taper process.  Taper is likely to begin before the end of the year, but he left open the possibility that tapering asset purchases could be pushed back should the COVID-19 situation or other dynamics change in the meantime.  The 10-year ended the week higher by five basis points and 5-year yields closed Friday up two basis points on the week at 0.80%.  Spreads on agency bullets and callables were mostly unchanged.  There are a handful of economic data releases scheduled for this week but none bigger than the August jobs report on Friday.



Agency bullet spreads were unchanged on the week, while callable spreads were mixed. On the short to intermediate end of the curve, spreads for 2- and 3-year maturity callables widened one basis point and 5-year callables were unchanged. On the long end of curve, 10- and 15-year callables tightened 4 basis points.



The following table reflects last week’s total issuance and call activity across the primary GSE issuers.  Total issuance surged to $10.0 billion and call volume declined to $2.2 billion.  For specific call dates and amounts for individual bond portfolios, be sure to log in to the Client Portal on the Vining Sparks website.



The Federal Home Loan Bank passed on its issuance slot last week.  Fannie Mae has a Benchmark issuance slot scheduled for this Wednesday, September 1st.  The Federal Home Loan Bank has another issuance date scheduled for next Wednesday, September 8th.









Daniel Anderson

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

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