Bond convexity

And so you have that, so you have almost like locking in a great rate of return.

And then lastly, and I'll try not to get too far into the term what's called convexity.

Convexity is just how a bond will react to interest rates.

But once interest rates get to a certain level, then the reaction on the downside is a lot less than you'd expect.

So here's an example.

But when we think about the relationship between mortgage rates and interest rates, Jay, there's also a feedback mechanism there.

Convexity hedging is what it's typically called.

Can you discuss the role that that might have played in this current episode and what we should expect going forward?

Sure.

I'm your host, Branden Ducharme, and I am so excited today to be joined by the legendary Harley Bassman.

For those of you that don't know Harley and haven't yet followed his work, he's oftentimes known as the convexity maven and is known for his work in the fixed income markets throughout a very long career.

multi decades, more, more decades than I've been alive.

Uh,