The COVID-19 pandemic has reshaped consumers’ behavior to an extent surpassing the impact of the global financial crisis of 2008. This fact, combined with drastic policy changes by the U.S. federal government, has effects on financial markets that will be felt for a long time.
Today, nearly three years after the first outbreak, the financial markets are battling an entirely new set of economic issues as the U.S. enters the endemic phase of the virus amid rising interest rates and inflation.
In this article, we review the impact of these economic changes on the mortgage market through the lens of portfolio risk observed by the FactSet risk model.