The Federal Reserve (the “Fed”) continued to buy Agency mortgage-backed securities (MBS) throughout the first quarter, purchasing roughly $370 billion gross and $145 billion net. The Fed announced that after March 23 the Federal Reserve Bank of New York will no longer conduct regular operations to purchase Agency commercial mortgage-backed securities (CMBS). The U.S. forbearance rate, which measures the share of mortgages with suspended payments, was at a pandemic-era low at the end of March. Although mortgage rates rose during the quarter, Agency MBS prepayment speeds remained elevated, due mostly to lags in loan closing timelines. First quarter gross issuance of Agency MBS was slightly less than $1 trillion while net issuance was approximately $185 billion. While spreads remained close to the tightest levels of the post-Global Financial Crisis (GFC) period, short-term technicals stayed favorable as net supply declined, Fed purchases increased to the highest levels since July 2020, and bank demand remained strong.