Eric Hagen: Right. No, that’s helpful. And so how are we also thinking about hedging your cost of funds at the short end of the yield curve, especially if it looks like the Fed could really cut rates next year, and that begins to get embedded into the forward curve even more?
David Finkelstein: Yes. You bet, Eric. So we’re keeping our repo profile relatively sure. We do think — although there’s 1/3 of a probability of another hike, we think it’s somewhat unlikely. And so we’re — pivoting to a point where the next move, to your point, would be cut. And so we’re managing it very nimbly and most of our focus is on hedging out the curve because we do think that’s really where the risk is given just the amount of supply coming to the market, particularly from the treasury market next year. I think there’s projected to be $1.7 trillion in net treasury issuance. And then you also have fed runoff to the tune of $900 billion between treasuries and Agency MBS. So a lot of the focus is out the curve as you see in the change in composition in our hedge profile quarter-over-quarter.
Operator: [Operator Instructions] Our next question will come from Matthew Erdner with JonesTrading.
Matthew Erdner: David, you just mentioned the composition of the hedge portfolio. Could you talk a little more about the added use of futures and kind of if you’re still sitting in that 7-year to 20-year part of the curve there?
David Finkelstein: Yes, we are. So in terms of the additions in the futures, look, at the end of the day, the way we looked at it was we wanted the liquidity of the futures market. We wanted to add hedges. We did a lot of that early in the quarter. And our composition of hedges was underweight futures relative to where we have historically been. So now we’re up to 24% of the hedges in the futures, which we’re comfortable with. And now one point to note is that swaps have generated really the vast majority of the income just given the shape of the curve, and you don’t get that benefit from futures. And so it does dampen EAD to some extent, but we’re okay with that.
Matthew Erdner: Got you. And then do you expect to kind of increase or decrease futures? Or are you guys kind of comfortable with the level that you’re at right now?
David Finkelstein: We’ll see how the market evolves, but we’re comfortable with where we’re at.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. David Finkelstein for any closing remarks. Please go ahead, sir.
David Finkelstein: Thank you, Chuck, and thanks for joining us today, and good luck, everyone.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
