In the final Convexity Pulse episode of 2025, Kirill Krylov and Steven Scheerer explore three themes shaping the 2026 MBS outlook: the quiet return of GSE buying, the growing policy debate around whether Fannie and Freddie should support construction lending, and the steady role of money managers as the market’s center of gravity. They discuss how recent FHFA actions have reopened retained portfolio capacity, why AD&C lending remains controversial despite supply shortages, and how passive and active fund flows continue to anchor MBS demand. The episode closes with a forward-looking assessment of where spreads may settle as banks, GSEs, and money managers each play distinct roles in next year’s market.