Invesco Mortgage Capital Targets 18%-20% Asset ROE Amid Challenging Interest Rate Environment
Invesco Mortgage Capital (IVR) reported a difficult third quarter, facing significant headwinds as market participants anticipated further Federal Reserve interest rate hikes. The company experienced an economic return of -11.6%, driven by sharp increases in Treasury yields, with 2-year yields rising over 70 basis points and 10-year yields climbing more than 80 basis points. Despite the recent downturn, management has outlined a strategic target for asset Return on Equity (ROE) between 18% and 20%. The company is currently evaluating its dividend policy in response to these volatile market conditions and the impact of rising rates on its mortgage-related assets.
Topics: earnings call interest rates macroeconomics mortgage REITs