FANNIE MAE (OTC:FNMA) shares are gaining on Thursday. Despite the boost, new disclosures are showing that the company has increased its exposure to interest rate movements inside its investment portfolio. Here’s what you need to know.
- FANNIE MAE by Fannie Mae stock is charging ahead with explosive momentum. What’s driving FNMA stock higher?
Growing Duration Exposure Signals A Change In Approach
Recent filings show that both Fannie Mae and Freddie Mac (OTC:FMCC) have allowed their duration gaps to widen to roughly one year. A duration gap measures how closely a company’s assets and liabilities move when interest rates change. A wider gap means the portfolio reacts more sharply to rate swings, according to Bloomberg.
If rates rise by one half of a percentage point, Fannie Mae’s portfolio would lose about $1.2 billion in value. Freddie Mac would see a hit of more than $1.6 billion.
This shift reflects a decision to move more capital into longer maturity mortgage backed securities instead of short-term holdings. That approach aligns with the administration’s effort to lower borrowing costs by increasing demand for mortgage bonds, which can help pull mortgage rates lower.
How Reduced Hedging Helps Keep Mortgage Rates Lower
By leaving more of their rate exposure unhedged, the companies avoid hedging activity that can push Treasury yields higher. Lower Treasury yields often translate into lower mortgage rates, which is a priority for policymakers focused on affordability.
Critical Levels To Watch For FNMA Stock
Fannie Mae has pushed back above several short and intermediate trend markers. The stock is trading above its 20-day simple moving average at $6.67, its 50-day simple moving average at $7.30, and its 100-day simple moving average at $7.13. This cluster of support helps explain why buyers have been stepping in around the $7 zone.
The broader trend is still mixed because FNMA remains below its 200-day simple moving average at $9.14, and the death cross from February, when the 50-day average slipped under the 200-day average, is still active.
Momentum sits in the middle of the range. RSI is at 52.15, which usually indicates that the move is not stretched in either direction and can still evolve into a trend if price continues forming higher lows. On a longer view, the stock is down 30.15% over the past year. The most recent swing low formed in April and the latest swing high came in May, which means the current rebound is part of a broader recovery attempt rather than a fully established uptrend.
- Key Resistance: $7.99 — This level sits near the 200 day exponential moving average and often acts as a key dividing line for trend traders.
- Key Support: $7.30 — This area lines up with the 50 day simple moving average and often serves as a buy‑the‑dip zone during early stage rebounds.
FNMA Shares Are Climbing
FNMA Price Action: FANNIE MAE shares were up 7.09% at $7.48 at the time of publication on Thursday, according to Benzinga Pro.
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