Tumbling rates at the long end of the curve have put a big hurt on the mREIT industry this month.
The 10-year Treasury yield is down to 2.17% at current writing vs. 2.52% at the start of May. The current Fed Funds rate is 2.39% (target range is 2.25%-2.5%), and - with the exception of the 30-year long bond - the entire Treasury curve is trading below that level.
An inverted curve not only puts pressure on the profits of levered carry players, but the plunge in mortgage rates portends a possible refinance wave, and another hit to profits.
The VanEck Mortgage REIT Income ETF (NYSEARCA:MORL) is down 1.05% today and about 6% for the month.
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