Agency Lending: Navigating Rising Interest Rates and Market Volatility

US Treasury interest rates have continued to rise due to uncertainty surrounding the post-election implications and final FOMC meeting, as well as volatility in cross-currency markets. Market participants are anticipating at least a 25 basis point rate cut at the remaining FOMC meeting scheduled for 2024. Agency spreads have remained relatively stable over the past two weeks, with both demand and supply decreasing amidst this rate sell-off and volatility. In terms of Agency pricing, Freddie Mac has decreased pricing grids for longer-term deals across various products, while Fannie Mae has kept their pricing unchanged.

In September, 5 and 10-year U.S. Treasuries reached a 52-week low, resulting in increased pipelines for Agency-funded projects. Both Fannie Mae and Freddie Mac have released their Q3 2024 financial results, showing new business volume up 39% over the previous quarter, with a total volume of $28.2 billion. However, the combined new business volume is essentially flat compared to Q3 2023.

Agency Lending Placement is an effective tool for managing your balance sheet, generating non-interest income, enhancing customer relationships, and attracting new clients. For more information about the program, please contact your Bankers’ Bank Commercial Lender today.