monthly macro monitor
key trends for the agency mbs investor
OCTOBER 2025
- The ongoing federal government shutdown has delayed the release of important economic data, and, thus, there were no official federal government releases of key employment and PCE metrics in October. Core CPI, which was also delayed but was released before month-end, declined slightly from the prior month.
- At the Fed’s October press conference, Chair Powell reiterated that the FOMC remains in a challenging situation, as tension between its dual mandate goals persists. Citing public and private sector data that have remained available, he noted that inflation risks continue to appear tilted to the upside and employment risks to the downside.
- In light of the balance of risks to both sides of its dual mandate, the Fed lowered the target range for the federal funds rate by 25 basis points in its second interest rate cut of 2025. During his remarks, however, Chair Powell stressed that FOMC members held strongly differing views regarding future monetary policy actions and that a December rate cut “is not a foregone conclusion – far from it.”
- Against a backdrop of light economic data releases and a more hawkish-than-expected Fed tone, benchmark interest rates and interest rate volatility declined, the yield curve flattened slightly, and Agency MBS spreads to benchmark rates tightened modestly during the month.
Key Rate and Spread trends
Important Disclosures
Federal funds rate data last updated October 31, 2025. Source: Federal Reserve.
Economic data last updated October 31, 2025. Core CPI and Core PCE exclude food and energy. Source: Bureau of Labor Statistics and Bureau of Economic Analysis.
U.S. Treasury yield curve reflects month-end Treasury yields for each tenor and month shown. Source: Bloomberg.
Agency MBS spread to U.S. Treasuries and Agency MBS spread to swaps reflect the 30-year current coupon Agency MBS yield spread to a 50/50 average of 5- and 10-year U.S. Treasury yields and a 50/50 average of 5- and 10-year SOFR OIS swaps, respectively. MOVE Index reflects the ICE BofA Move Index. Each chart is shown over the trailing 12 months ended October 31, 2025, and each monthly change (rounded to the nearest whole number) reflects the difference between October 2025 month-end data and September 2025 month-end data. Source: Bloomberg.
Data and commentary, including thoughts, opinions, and outlook of AGNC Investment Corp. (“AGNC”) management, are provided for information purposes only and should not be construed as investment advice.
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