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Mortgage-backed securities respond violently to moves in interest rates.
The moves in interest rates may seem small, but they're pretty powerful.
There is another, more traditional risk: significant moves in interest rates could affect the mortgages that are bundled into the securities held by Ginnie Mae funds.
And if so, how long will it be before they start to rise?Financial markets are betting that the next moves in interest rates will be upwards.
The reason is that Carney and the other members of Threadneedle Street's monetary policy committee have linked future moves in interest rates to joblessness.
This exacerbates moves in interest rates, producing a snowball effect that can push rates far lower or higher, and faster, than in previous years.
Similar(46)
In other words, the next move in interest rates will probably be downwards.
He kept the markets guessing about the next move in interest rates.
But policymakers have repeatedly said they expect the next move in interest rates will be up.
In fact, he ought to make clear that each and every move in interest rates is contingent on events in the economy.
The central bank considers the removal of the deposit ceiling as the most critical yet most risky move in interest rate liberalization".
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com