- Buying any interest-rate sensitive security with the Federal Reserve starting a series of interest rate hikes is a contrarian play.
- Absent the $1.68 trillion reverse repo facility maintained by the Federal Reserve, short-term risk-free interest rates would likely be negative.
- There is a possibility that a sharp decline in gasoline prices could occur if renewable fuel requirements are suspended. That could reduce the Fed's preferred inflation measure.
- The risk inherent in MVRL could be compensated for by the 16% yield.
- There are many “black swan” possible events that could make the current surge in inflation actually be transitory.
For further details see:
MVRL And The MREITs After The Federal Reserve Initiates Rate Hikes