What the Fed doesn't understand because it's made up of academics, says CYS Investments CEO...

|About: CYS Investments, Inc. (CYS)|By:, SA News Editor

What the Fed doesn't understand because it's made up of academics, says CYS Investments CEO  Kevin Grant - presenting at KBW (presentation) - is the 30-year mortgage market is a forward market, i.e. there's no such thing as a slow adjustment, changes are priced in immediately. 30-year MBS are now priced for Operation Taper, he says, noting the large decline in 30-year vs. 15-year paper. CYS is loving it, picking up assets at spreads it couldn't have hoped to achieve previously.