Perspectives
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Monthly Macro Monitor: May 2026
Read More- Volatile Geopolitical Backdrop and Energy Crisis: The global geopolitical backdrop remains volatile as the Iran conflict enters its fourth month. Global energy prices remained significantly elevated in May as a result of the continued closure of the Strait of Hormuz.
- Employment: Key employment measures released in May were generally strong. U.S. nonfarm payrolls (NFP) increased month-over-month, albeit at a slower pace than the prior month, but were materially above estimates. The unemployment rate remained unchanged, consistent with expectations. Previously reported NFP data for February and March were revised modestly lower by 16,000 jobs in aggregate.
- Inflation: Key inflation measures released in May increased month-over-month, which was generally consistent with expectations amid elevated energy prices. Inflationary pressures, coupled with strong employment measures, continue to drive uncertainty regarding the Fed’s neutral rate level. Interest rate expectations have evolved significantly year-to-date, with fed funds futures now pricing in a greater than 60% probability of an interest rate hike by the end of 2026, compared to expectations for two interest rate cuts at the beginning of the year.
- Federal Reserve and Monetary Policy: The target range for the federal funds rate remained unchanged in May at 3.50-3.75%, as there was no regularly scheduled FOMC meeting or policy update during the month. On the procedural front, Kevin Warsh was confirmed by the Senate to serve as the 17th Chair of the Federal Reserve, succeeding Jerome Powell, and he was sworn in on May 22. As previously announced, Powell will remain on the Board of Governors for a period of time “to be determined,” and Stephen Miran’s resignation from the Board became effective with Warsh’s swearing in to the Board.
- Interest Rates and Agency MBS Spreads: Continued inflationary pressures and increased expectations for an interest rate hike in 2026 once again drove higher interest rates across the curve month-over-month. Despite the fragile geopolitical backdrop and periods of intra-month volatility, financial markets retained a risk-on sentiment in May, interest rate volatility declined slightly, and Agency MBS spreads to benchmark rates tightened during the month.
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Why Agency MBS: Market Snapshot
Read MoreAgency MBS assets benefit from compelling fundamentals and favorable attributes that make them a critical building block of any investment portfolio.
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Monthly Macro Monitor: May 2026
Read MoreA quick update on the market environment, including key rate and spread trends that are top of mind for Agency MBS investors.
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Monthly Macro Monitor: April 2026
Read MoreA quick update on the market environment, including key rate and spread trends that are top of mind for Agency MBS investors.
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The Fed Report: April 2026
Read MoreKey highlights from the April 2026 FOMC policy update along with our insights and takeaways.
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The Earnings Extract: Q1 2026
Read MoreCommentary from our quarterly earnings call covering the macroeconomic landscape, the Agency MBS market environment, and our quarterly performance.
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Monthly Macro Monitor: March 2026
Read MoreA quick update on the market environment, including key rate and spread trends that are top of mind for Agency MBS investors.
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The Fed Report: March 2026
Read MoreKey highlights from the March 2026 FOMC policy update along with our insights and takeaways.
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Monthly Macro Monitor: February 2026
Read MoreA quick update on the market environment, including key rate and spread trends that are top of mind for Agency MBS investors.
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2025 Letter to Stockholders
Read MoreIn his annual letter to stockholders, President, CEO & CIO Peter Federico provides a recap of 2025 performance and the outlook for AGNC in the year ahead.
