Although bank failures unfolded near the end of the first quarter, the impacts of Silicon Valley Bank and Signature Bank being taken into receivership by the Federal Deposit Insurance Corp. (FDIC) lingered in the Agency MBS market throughout the second quarter. In total, there was a little more than $100 billion of Agency bonds on these banks’ balance sheets that are still being sold into the market. In general, sales have been going well with strong demand from money managers. Despite this appetite, these sales represent an additional $10 billion to $20 billion per month of supply to the market. This, coupled with the Fed winding down its balance sheet, has contributed to spread widening.