On October 12, according to Jinshi News, investors have been withdrawing from U.S. mortgage bond funds at a historically unprecedented pace over the past three weeks, with the outflows ranking among the seven most severe since early 2021. As interest rates soar, investors are seeking to avoid market volatility risks. The U.S. mortgage-backed securities index recorded its second-worst monthly performance on record in September. Previously, U.S. Treasury yields surged to decades-high levels due to rising oil prices, heightened inflation concerns, and market expectations of a Fed rate hike, triggering a sell-off in mortgage bonds. MBS are highly sensitive to sudden fluctuations in bond yields, as yields serve as the pricing benchmark for borrowing costs across the entire economic system. When interest rates rise, homeowners typically stop refinancing their mortgages, leading investors to hold low-yield securities for longer than previously expected. Strategist Erica Adelberg noted that the Fed's tightening of monetary policy and the flattening yield curve could weaken demand from banks, a significant buyer of MBS. On the positive side, as mortgage rates reach their highest levels since 2023, refinancing and home-buying demand may be suppressed, potentially slowing the growth of home prices and loan volumes. MBS supply is expected to decline before the end of the year.