/MBS: And Brean's Scott Buchta noted that...>

US TSYS: /MBS: And Brean's Scott Buchta noted that "the market historically has

underestimated future rate hikes in a tightening cycle" and now, "JPM, GS and

now Nomura have called for four rate hikes in 2018." Brean Capital currently

thinks "we will get at least 2, depending on inflation," he adds.

- He said "forward curves have priced in 1 hike in December, one in 2018 and one

in 2019."  So he urged to "take advantage of low vol and flat curves to hedge

funding exposure on the front end of the yield curve (especially Banks, REITs

and HF that employ leverage)." He adds to "add Floating Rate Assets as a core

holding" with "barbell component" so "overweight Agency CMBS vs Agency MBS

(6-9mo Horizon)."

- He urged to add "convexity protection against rising vol" and protection

"against wider spreads from the Fed Tapering in 2018."