Question · Q3 2025
Timothy D'Agostino asked about the factors needed for the economic net interest margin to continue widening or pick up pace through year-end and into 2026.
Answer
CFO Gordon Harper stated that the trend depends on the portfolio's construction and the pace of Fed rate cuts impacting financing costs. Co-Chief Investment Officer Desmond Macauley added that forward ROEs of 16%-18% on production coupons are considered, with the 18% dividend yield serving as a hurdle rate, indicating a constructive medium-term outlook for assets to exceed this rate with further tightening.