Federal Agricultural Mortgage Corporation · NYSE:AGM
Federal Agricultural Mortgage — Conference Presentation (August 2017)
11 slides from Federal Agricultural Mortgage's conference presentation, August 2017
Slide 1: Economic and Interest Rate Market Update
Economic and Interest Rate Market Update August 2017
Slide 2: Economic & Interest Rate Environment: Low for Longer? Gradual Normalization?
Economic & Interest Rate Environment: Low for Longer? Gradual Normalization?
Slide 3: Economic and Interest Rate Environment
Economic and Interest Rate Environment • Job growth remains steady with unemployment at 18-year low of 4.3% • Average monthly nonfarm payroll job growth of 184,000 in 2017 – Just below the 187,000 pace from 2016 but off 2015 pace of 226,000 – Economy needs fewer new jobs on a monthly basis with unem
Slide 4: Interest Rate Environment
Interest Rate Environment Long Term Treasury Yields – 2013 to Present 3.5 3 2.5 2 1.5 1 0.5 0 7/29/2013 11/29/2013 3/29/2014 7/29/2014 11/29/2014 3/29/2015 7/29/2015 11/29/2015 3/29/2016 7/29/2016 11/29/2016 3/29/2017 7/29/2017 2 year Treasury 5 year Treasury 10 year Treasury • Long-term rates are d
Slide 5: Interest Rate Environment
Interest Rate Environment Short Term Rates 2015 - Present 1.4 1.2 1 0.8 0.6 0.4 0.2 0 1/2/2015 4/2/2015 7/2/2015 10/2/2015 1/2/2016 4/2/2016 7/2/2016 10/2/2016 1/2/2017 4/2/2017 7/2/2017 1-month LIBOR 3-month LIBOR Fed Funds Rate • Short-term rates such as Fed Funds and LIBOR have all been steadily
Slide 6: Federal Reserve Normalization and Market Impacts
Federal Reserve Normalization and Market Impacts
Slide 7: Federal Reserve Normalization & Market Impacts
Federal Reserve Normalization & Market Impacts • Four rate hikes since 2015 have brought the target fed funds rate to 1.00% to 1.25% – Following 0.25% increases in March and June of 2017 the futures market is now projecting just a 36% chance of another rate hike in 2017, likely in December • The Fed
Slide 8: Federal Reserve Normalization & Market Impacts
Federal Reserve Normalization & Market Impacts • Economists are forecasting short term rates to increase roughly the same as long term rates over the next 12 months in a parallel yield curve shift – Economists are only pricing in one more rate hike from the Fed in 2017 • Market pricing via futures m
Slide 9: Product and Pricing Update
\7; Product and Pricing Update
Slide 10: Product Impact – Farm & Ranch
Product Impact – Farm & Ranch • Long Term Rates are slightly lower for the year, however remain above lows seen in July 2016 – Strong demand for Farm and Ranch fixed rate loans – 15-year products remain very attractive relative to other products – 5-year ARM beginning to see more volume due to relat
Slide 11: Product Impact – USDA
Product Impact – USDA • Long Term Rates have moved lower in 2017 however remain well above the 2016 lows – Long term fixed rate products remain most popular, led by the 20-year and 30-year fixed rate – Reset products provide attractive initial pricing with flexibility of longer amortizations to help
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