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Pimco, TCW and DoubleLine Bet on Mortgage Bonds as Rates RisePimco, TCW and DoubleLine Bet on Mortgage Bonds as Rates Rise
Mortgage-backed securities usually get hit particularly hard by unexpected changes in interest rates. That sensitivity is known as negative convexity, but it’s all but disappeared for now, because home loan rates have surged and most homeowners are far from being able to refinance and prepay their loans.