2026 mid-year Agency MBS investor survey: Agency MBS Market Commentary

Research evidence excerpt

2026 mid-year Agency MBS investor survey: Agency MBS Market Commentary

Barclays | Agency MBS Market Commentary

2026 mid-year Agency MBS investor survey

Higher inflation and rising volatility are top of mind for MBS investors in 2H26

Mortgage investors expect inflation to accelerate in 2H26, accompanied by a meaningful

increase in interest rate volatility (Figure 1). The majority expect y/y core CPI to exceed 3%,

implying average monthly readings above 0.2% for the remainder of the year, faster than the

last print of 0.2% in May, and exceeding Barclays' own forecast of 2.9% (see The rudder to an

invisible hand). Rising inflation concerns translate to two-thirds of our survey participants

expecting MOVE to spike above 90bp, compared to a spot level of about 70bp prevalent during

the survey period. While risk assets are expected to do well, with most anticipating the S&P 500

to hit 8000, equity volatility is also expected to remain considerable. Over 40% see stocks falling

below 7000 at some point, and almost 40% of those expecting the S&P 500 to rise above 8000

also expect the index to fall below 7000 at some point.

FIGURE 1. Investors expect faster inflation and rising volatility in 2H26, with the Fed holding and risk doing well

%

% by count, six-month outlook

Source: Barclays Research

Concerns about inflation echo in the participant ranking of potential risks for 2H26, topping the

chart and listed in the top three by 82% of investors (Figure 2). Sensibly, the Fed's potential

response to this is closely behind at number two. Geopolitical risks round out the top three,

with the Iran war yet to be concluded. This compares to Prepayments as the number one risk

back in November on the back of elevated October speeds, when geopolitics ranked behind a