Peter Federico: Yes. And just to add to that last point, Chris, is right, with the 10-year now at around 350. We’re obviously a little less worried about the interest rate rally risk in the market. I think the 10-year it seems to be probably closer to the lower end of the range than the higher end of the range. So we’re more comfortable with a smaller duration gap for the time being anyhow.
Vilas Abraham: And can you also just briefly talk through demand dynamics who the incremental buyers are that you’re seeing just how you see that playing out this year?
Peter Federico: Yes. Well, it’s really €“ you have to look at the demand dynamic versus the supply dynamic. And as I mentioned, I think the supply dynamic is still really going to be reasonably favorable given the fact that organic supply will be positive, a couple of hundred billion. But obviously, there is lots of headwinds from an organic supply perspective. But what we’ve seen and this really was the shift in the momentum that I alluded to there came a point in the fourth quarter where fixed income became much more attractive, just broadly speaking, to a much wider group of investors. And so we saw significant bond fund inflows for the first time in 2022. In fact, if you look at bond fund flows for all of €˜22, I think the number is something like $250 billion of negative outflows in the year.
But if you look at the flows in November and December, they were decidedly positive. And in fact, I think year-to-date, they are already probably close to $50 billion of inflows. So that rotation, out of other asset classes into fixed income and into Agency MBS, I think, is going to continue particularly against the outlook from the equity markets is obviously, from a portfolio perspective, I think investors are favoring a much greater share of fixed income securities. So I think that demand could continue. Obviously, as rates stabilize and the market gets more comfortable that we’ve seen the high-end rates, which at some point that will become clearer to the market. There is €“ and the economic outlook improves or at least stabilizes, I think there is a chance that banks reemerge as a source of demand.
So I think those two things together could lead to demand outpacing supply. And that’s why over the short-term, our view is that spreads are likely to buy a bias to be somewhat tighter not dramatically, but I think the trend could stay in place for some period of time, particularly because the seasonals from a supply perspective are also really good over the next several months.
Vilas Abraham: Got it. Thank you.
Peter Federico: Sure. Thanks for the questions, Vilas.
Operator: The next question comes from Doug Harter with Credit Suisse. Please go ahead.
Doug Harter: Hi, thanks.
Peter Federico: Good morning, Doug.
Doug Harter: Can you talk about your appetite to €“ good morning, can you talk about your appetite to raise capital? It looks like you were active with the ATM kind of early in the fourth quarter but then less so, just kind of how you’re thinking about that opportunity to put new money to work, given the return environment you highlighted?
