Sector Update

January 24, 2022



A few points to start your week


Individual Sector Updates – Click to Access

Agency Market | Agency MBS | Agency ARM | Agency CMO | Municipal Market | SBA Market



Today – Yields lower, curve slightly flatter, equities continue broad decline


Treasury yields dip off cycle highs prior to Fed meeting


Summary of Economic Releases


Equities struggle to digest prospects of higher rates, banks relatively better by large gap


Upcoming Webinars – (1 hour CPE available, registration opens 2 weeks prior to each webinar)

1/11: 1st Quarter Economic Outlook Webinar (slides | webinar replay)

2/22 Bank: Positioning the Investment Portfolio for Performance

2/24 Credit Union: Positioning the Investment Portfolio for Performance

3/8 Bank: Balance Sheet Strategies in an Expected Tightening Cycle

3/10 Credit Union: Balance Sheet Strategies in an Expected Tightening Cycle



Yield on 10- and 5-year maturities remain close to pre-pandemic levels


Yield on 3- and 2-year maturities still lag pre-pandemic levels


Curve Shape – 2s5s moves flatter, still 6 bps steeper YTD


Curve Shape – 2s10s moves flatter, still 4 bps steeper YTD


Food for Thought – SBA 7(a) prepays continue to grind back towards historical norms



What We’re Reading


Market Today | Daily

Weekly Recap | Weekly, Friday

Monthly Review (December) | Monthly, 1st business day

Brokered Deposit Rate Indications | Weekly, Monday

Investment Alternatives Matrix | Weekly, Tuesday

MBS Prepay Commentary (January) | Monthly, 5th business day

SBA Prepay Commentary (January) | Monthly, 10th business day


WSJ: Fed Steps Up Deliberations on Shrinking Its $9 Trillion Asset Portfolio

“Fed Chairman Jerome Powell and several colleagues have indicated such a turn from expanding the portfolio to contracting it is likely to be measured in months and not years this time around.”


Vining Sparks: Loan Trading: Consumer Lending

It is important to stay abreast of market changes in rates and potential credit concerns that may be creeping in that could impact production and performance. We welcome the opportunity to assist you in evaluating your portfolio for areas of opportunity or provide additional color on this dynamic market.


Vining Sparks Interest Rate Products: Margin Compression: Causes and Solutions

In this article, we examine why the industry is facing margin compression, challenge some of the more prevalent assumptions about banks’ risks profiles and highlight our best ideas for dealing with the current environment.


Vining Sparks: Coronavirus Chartbook and Coronavirus State Charts


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