How the Fed Is Setting Up an Epic Carry Trade for mREITs

How the Fed Is Setting Up an Epic Carry Trade for mREITs

In just a few short weeks, the Federal Reserve will adjourn from another meeting of its Federal Open Market Committee. Over the next minutes, days, weeks, and months, the markets will digest the Fed's actions, words, and policies. Some opportunities will fall by the wayside, while others will come to the forefront.

For the big names in the mREIT sector -- American Capital Agency , Annaly Capital Management , Hatteras Financial , Invesco Mortgage Capital , and others -- the coming actions from the Federal Reserve could be an opportunity to regain the losses incurred over the past few months.

In the video below, Motley Fool contributor Jay Jenkins explains a circumstance where, driven by the strong recovery in real estate, mortgage REITs could earn big profits from a carry trade delivered by the Fed on a silver platter.

With so much of the financial industry getting bad press these days, it may be a "greedy when others are fearful" moment. Not surprisingly, some of Warren Buffett's biggest investments are in the space. In the Motley Fool's free report, "The Stocks Only the Smartest Investors Are Buying," you can learn about a small, under-the-radar bank that's too tiny for Buffett's billions. Too bad, because it has better operating metrics than his favorites. Just click here to keep reading.

The article How the Fed Is Setting Up an Epic Carry Trade for mREITs originally appeared on

Fool contributor Jay Jenkins has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published